China Steel Corp. v. United States

Slip Op. 04-6

United States Court of International Trade

CHINA STEEL CORPORATION and YIEH
LOONG,

Plaintiff,

v.

UNITED STATES, Before: Pogue, Judge

Defendant, Court No. 01-01040

and

BETHLEHEM STEEL CORPORATION; NATIONAL
STEEL CORPORATION; UNITED STATES STEEL
CORPORATION; GALLATIN STEEL COMPANY;
IPSCO STEEL INC.; NUCOR CORPORATION;
STEEL DYNAMICS, INC.; and WEIRTON STEEL
CORPORATION,

Defendant-Intervenors.

[Commerce’s Remand Determination affirmed.]

Decided: January 26, 2004

Miller & Chevalier Chartered (Karl Abendschein, Peter Koenig) for
Plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, Jeanne E. Davidson, Deputy Director, Michael D. Panzera,
Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Augusto Guerra, Attorney, Office of Chief
Counsel for Import Administration, U.S. Department of Commerce, Of
Counsel, for Defendant.

Dewey Ballantine LLP (Bradford L. Ward, Hui Yu) for Defendant-
Intervenors Bethlehem Steel Corporation, National Steel
Corporation, and United States Steel Corporation.

Schagrin Associates (Roger B. Schagrin) for Defendant-Intervenors
Gallatin Steel Company, IPSCO Steel Inc., Nucor Corporation, Steel
Court No. 01-01040 Page 2

Dynamics, Inc., and Weirton Steel Corporation.1

Opinion
Pogue, Judge: This is a review of the Department of Commerce’s

Final Results of Redetermination Pursuant to Court Remand, Certain

Hot-Rolled Carbon Steel Flat Products from Taiwan (Aug. 14, 2003)

(“Remand Determ.” or “Remand Determination”).2 The Department’s

Remand Determination followed the Court’s decision in China Steel

Corp. v. United States, 27 CIT __, 264 F. Supp. 2d 1339 (2003)

(“CSC/YL I”)3 (remanding aspects of Commerce’s final affirmative

antidumping duty determination in Certain Hot-Rolled Carbon Steel

Flat Products from Taiwan, 66 Fed. Reg. 49,618 (Dep’t Commerce

Sept. 28, 2001) (notice of final determination of sales at less

1
Bethlehem Steel Corporation, National Steel Corporation,
and United States Steel Corporation collectively will be referred
to as “Defendant-Intervenors I” or “Def.-Int. I,” while Gallatin
Steel Company, IPSCO Steel Inc., Nucor Corporation, Steel
Dynamics, Inc., and Weirton Steel Corporation collectively will
be referred to as “Defendant-Intervenors II” or “Def.-Int. II.”
The following domestic entities also supported the antidumping
petition before the agency, although they are not parties to this
action: U.S. Steel Group (a unit of USX Corporation), United
Steelworkers of America, LTV Steel Company, Inc., and Independent
Steelworkers Union. Certain Hot-Rolled Carbon Steel Flat
Products from Argentina, India, Indonesia, Kazakhstan, the
Netherlands, the People’s Republic of China, Romania, South
Africa, Taiwan, Thailand, and Ukraine, 65 Fed. Reg. 77,568,
77,568 (Dep’t Commerce Dec. 12, 2000) (notice of initiation of
antidumping duty investigations). In general, these parties will
be referred to as the “Domestic Producers.”
2
Defendant-Intervenors have not submitted comments on the
Remand Determination.
3
Familiarity with the Court’s earlier opinion is presumed.
Court No. 01-01040 Page 3

than fair value) (“Final Determ.” or “Final Determination”)).4 The

remand order directed Commerce to reconsider aspects of the

agency’s final antidumping determination, specifically its

affiliation determination, its use of Plaintiff’s affiliate

downstream sales data, and its adverse facts available

determination.5 27 CIT at __, 264 F. Supp. 2d at 1366, 1372. The

4
Commerce’s Final Determination incorporates by reference
the agency’s Issues and Decision Memorandum, which responds to
CSC/YL’s and the Domestic Producers’ comments filed during the
antidumping investigation. Final Determ., 66 Fed. Reg. at
49,619; Dep’t of Commerce Mem. from Joseph A. Spetrini, Deputy
Assistant Sec’y Enforcement Group III, to Faryar Shirzad,
Assistant Sec’y for Imp. Admin., Issues and Decision Memo for the
Antidumping Investigation of Certain Hot-Rolled Carbon Steel Flat
Products from Taiwan - October 1, 1999 through September 30,
2000, P.R. Doc. 151, Def.’s Ex. 8 (Sept. 21, 2001) (“Issues and
Decision Mem.”).
Citations to the administrative record include references to
both public documents (“P.R. Doc.”) and proprietary documents
(“C.R. Doc.”).
5
Prior to the preliminary determination, Commerce concluded
that China Steel and Yieh Loong were affiliated under 19 U.S.C. §
1677(33)(E), and collapsed the two entities into a single
producer pursuant to 19 C.F.R. § 351.401(f) (2001). Dep’t of
Commerce Mem. from Patricia Tran, Case Analyst, to Joseph A.
Spetrini, Deputy Assistant Sec’y Enforcement Group III,
Antidumping Duty Investigation on Certain Hot-Rolled Carbon Steel
Flat Products from Taiwan: Affiliation Issue regarding China
Steel Corporation (China Steel) and Yieh Loong Enterprise Co.,
Ltd. (Yieh Loong), C.R. Doc. 51, Def.’s Conf. Ex. 5 at 2, 4 (Apr.
19, 2001); see also Certain Hot-Rolled Carbon Steel Flat Products
from Taiwan, 66 Fed. Reg. 22,204, 22,206 (Dep’t Commerce May 3,
2001) (notice of preliminary determination of sales at less than
fair value). As a result of those two determinations, Commerce
calculated a single weighted-average dumping margin for
Plaintiff. Accordingly, the Court’s use of “Plaintiff” or
“CSC/YL” exclusively refers to the collapsed entity; all other
references to the two corporations by their proper names shall
refer only to the respective individual corporation.
Court No. 01-01040 Page 4

Court also will review Plaintiff’s corroboration issues, which were

deferred in CSC/YL I. 27 CIT at __, 264 F. Supp. 2d at 1362 n.21.

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and

19 U.S.C. § 1516a(a)(2)(B)(i) (2000). For the reasons set forth

below, the Court sustains Commerce’s Remand Determination and the

agency’s corroboration determination.

I. Standard of Review

This Court will uphold an agency determination unless it is

“unsupported by substantial evidence on the record, or otherwise

not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

II. Discussion

There are four issues presented. The Court must determine:

(A) whether Commerce’s affiliation determination is in accordance

with law, (B) whether Commerce’s determination that Plaintiff’s

home market sales to affiliates satisfy the five percent threshold

required by its regulation, such that those sales should be used in

calculating the dumping margin, is in accordance with law, (C)

whether Commerce’s application of adverse facts available is

supported by substantial evidence and in accordance with law,6 and

6
In CSC/YL I, the Court also instructed the agency to reopen
the record for further consideration of Plaintiff’s warranty
costs data requested orally by Commerce on May 3, 2001. CSC/YL
I, 27 CIT at __, 264 F. Supp. 2d at 1370. Because both parties
concede that this issue has been resolved on remand, the Court
Court No. 01-01040 Page 5

(D) whether Commerce’s corroboration determination is in accordance

with law.

A. Affiliation

In the Final Determination, Commerce treated Plaintiff as a

single “collapsed” entity, and concluded that CSC/YL was affiliated

with Yieh Hsing Enterprise Co., Ltd. (“YH”), Yieh Phui Enterprise

Co., Ltd. (“YP”), and Persistence Hi-Tech Materials Inc.

(“Persistence”) pursuant to 19 U.S.C. § 1677(33)(F)-(G).7 Issues

and Decision Mem., P.R. Doc. 151, Def.’s Ex. 8 at 6-7. Commerce

made this conclusion because Yieh Loong, aware of the statutory

definition of “affiliated parties,” conceded affiliation with YH,

YP, and Persistence in its section A questionnaire responses; Yieh

Loong, YH, YP, and Persistence shared a common chairman of the

board; Taiwanese law grants “extensive power” to chairmen of the

board; and Yieh Loong, YH, and YP each own a minority stock

interest in one another. Id.; Dep’t of Commerce Mem. from Patricia

Tran, Case Analyst, to File, Certain Hot-Rolled Carbon Steel Flat

Products from Taiwan – China Steel Corporation (China Steel), Yieh

Loong Enterprise (Yieh Loong), and affiliated resellers, C.R. Doc.

declines to address it here. Pl.’s Comments on Remand Decision
at 10 n.4 (“This Court need do nothing as to warranty costs.”)
(“Pl.’s Comments”); see Remand Determ. at 11.
7
This conclusion is referred to as Commerce’s “affiliation
determination.”
Court No. 01-01040 Page 6

50, Def.’s Conf. Ex. 4 at 2 (Apr. 19, 2001). In reaching its

conclusion, Commerce first found that Yieh Loong was affiliated

with YH, YP, and Persistence. Issues and Decision Mem., P.R. Doc.

151, Def.’s Ex. 8 at 7. Commerce then concluded that “China Steel

[wa]s affiliated with Yieh Loong’s affiliates,” because

“[c]ollapsed companies constitute a single entity and therefore

affiliates of either company are affiliates of the collapsed

entity.” See id. at 6-7. The Court sustained the agency’s

affiliation determination as supported by substantial evidence, but

remanded the decision for further consideration of the temporal

aspect of the parties’ relationships as required by the agency’s

regulation. CSC/YL I, 264 F. Supp. 2d at 1354.

Affiliation is defined statutorily at 19 U.S.C. § 1677(33).8

8
Title 19 U.S.C. § 1677(33) reads as follows:

The following persons shall be considered . . . “affiliated”
or “affiliated persons”:
(A) Members of a family, including brothers and sisters
(whether by the whole or half blood), spouse, ancestors, and
lineal descendants.
(B) Any officer or director of an organization and such
organization.
(C) Partners.
(D) Employer and employee.
(E) Any person directly or indirectly owning,
controlling, or holding with power to vote, [five] percent
or more of the outstanding voting stock or shares of any
organization and such organization.
(F) Two or more persons directly or indirectly
controlling, controlled by, or under common control
with, any person.
(G) Any person who controls any other person and
such other person.
Court No. 01-01040 Page 7

Commerce also defines affiliation in its regulations at 19 C.F.R.

§ 351.102(b) (defining “[a]ffiliated person; affiliated parties”

according to 19 U.S.C. § 1677(33)). In rendering an affiliation

determination, Commerce’s regulation further requires the agency to

“consider the temporal aspect of a relationship in determining

whether control exists; normally, temporary circumstances will not

suffice as evidence of control.” 19 C.F.R. § 351.102(b); see also

Hontex Enters., Inc. v. United States, 27 CIT __, __, 248 F. Supp.

2d 1323, 1343 (2003).

The Court pronounced its understanding of the agency’s

temporal determination in Hontex Enters., Inc. v. United States, 27

CIT at __, 248 F. Supp. 2d at 1344 n.17, stating that “Commerce [is

required to] weigh the nature of entities’ contacts over time, and

must determine how such contacts potentially impact each entity’s

business decisions. Sporadic or isolated contacts between

entities, absent significant impact, would be less likely to lead

to a finding of control.” Id. In promulgating regulations

governing the agency’s temporal determination, however, Commerce

also explained that it may find control where the parties’

relationship during the period of review is short-term or brief in

For purposes of this paragraph, a person shall be considered to
control another person if the person is legally or operationally
in a position to exercise restraint or direction over the other
person.

19 U.S.C. § 1677(33).
Court No. 01-01040 Page 8

duration. Antidumping Duties; Countervailing Duties, 62 Fed. Reg.

27,296, 27,298 (Dep’t Commerce May 19, 1997) (final rule) (“Final

Rule”).

[T]he Department normally will not consider firms to be
affiliated where the evidence of “control” is limited,
for example, to a two-month contract. On the other hand,
the Department cannot rule out the possibility that a
short-term relationship could result in control.
Therefore, the Department will consider the temporal
aspect of a relationship as one factor to consider in
determining whether control exists. In this regard, we
also should note that we do not intend to ignore a
control relationship that happens to terminate at the
beginning (or comes into existence at the end) of a
period of investigation or review.

Id.

On remand, Commerce characterized China Steel’s relationship

with Yieh Loong as “extensive” and “long-term,” rather than “short

term,” “temporary,” or “limited.” Remand Determ. at 2-3. Commerce

decided that China Steel exercised “substantial” control over Yieh

Loong for the last seven months of the period of investigation

(“POI”) (October 1, 1999 through September 30, 2000), and

throughout the investigation itself (December 4, 2000 through April

23, 2001), for the following five reasons: (1) China Steel entered

into a stock-purchase agreement with Yieh Loong on December 17,

1999, Letter from Peter Koenig and Kristen Smith, Ablondi, Foster,

Sobin & Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc. 31,

Pl.’s Conf. Ex. 4 at 3 (Mar. 20, 2001) (“CSC’s Mar. 20 Response”),9

9
Plaintiff’s counsel changed affiliation from Ablondi,
Foster, Sobin & Davidow, P.C., to Miller & Chevalier Chartered
Court No. 01-01040 Page 9

(2) China Steel acquired a significant portion of Yieh Loong’s

equity on February 21, 2000, id. at 5; Remand Determ. at 3, (3)

China Steel conceded that it “gained the management and operation

right” for Yieh Loong, CSC’s Mar. 20 Response, C.R. Doc. 31, Pl.’s

Conf. Ex. 4 at 4, (4) China Steel shared two board members and a

“supervisor” of Yieh Loong’s board of directors, id., and (5) China

Steel directed Yieh Loong’s board of directors to appoint several

of its own employees to high-ranking managerial positions at Yieh

Loong, id. at Ex. A-25-C art. 1; see Remand Determ. at 2-3.

Commerce therefore concluded that at the time the agency requested

China Steel’s downstream sales information, China Steel was in a

position to obtain and submit downstream sales information from

Yieh Loong for the entire POI. See id. at 3-4. Commerce also

concluded that Plaintiff, as a collapsed entity, was in a position

to compel Yieh Loong’s affiliates to submit downstream sales data

for the entire POI. See id.

Plaintiff makes two arguments challenging Commerce’s temporal

determination. First, Plaintiff asserts that it was not required

to submit downstream sales information for Yieh Loong’s affiliates

until February 21, 2000, when China Steel became affiliated with

Yieh Loong. See Pl.’s Comments at 8 (citing Pl.’s Br. Supp. Mot.

J. Agency R. at 20) (“Pl.’s Br.”)). Second, Plaintiff contends

prior to seeking judicial review of Commerce’s affirmative less
than fair value (“LTFV”) determination with the Court.
Court No. 01-01040 Page 10

that Yieh Loong was unable to compel its affiliates to produce the

requested sales information when Commerce distributed its

questionnaires because the common chairman between Yieh Loong, YP,

and Persistence resigned from that position. Pl.’s Comments at 3-

4. The Court finds both arguments unpersuasive.

As noted above, the agency’s regulations require it to

“consider” the temporal aspect of the affiliation relationship.

The regulation’s history clearly reveals that the duration of the

parties’ relationship is merely one factor the agency must consider

in determining whether control exists. Final Rule, 62 Fed. Reg. at

27,298. Thus, while Commerce is required to examine the temporal

aspect of the affiliation relationship, this factor is not in and

of itself determinative. The Court, nevertheless, must decide

whether Commerce’s temporal determination is supported by

substantial evidence and in accordance with law.

The record clearly reveals that China Steel’s and Yieh Loong’s

relationship was neither short nor temporary, as the parties’

relationship formally commenced on December 17, 1999, CSC’s Mar. 20

Response, C.R. Doc. 31, Pl.’s Conf. Ex. 4 at 3, and continued

throughout the Department’s investigation of the antidumping

petition. Importantly, China Steel gained substantial control over

Yieh Loong’s management and operation less than five months into

the POI. See id. at 5. At this particular time, China Steel

acquired a significant percentage of Yieh Loong’s stock, which
Court No. 01-01040 Page 11

resulted in the two companies sharing board members and a board

supervisor. Id. China Steel contemporaneously directed Yieh Loong

to appoint several of its former employees to high-ranking

managerial positions. Id. at A-25-C art. 1. The record also

reveals that China Steel increased its equity ownership in Yieh

Loong during the last month of the POI. Id. at 5. Consequently,

the record substantially supports Commerce’s conclusion that China

Steel maintained significant control over Yieh Loong for over seven

months during the POI. Moreover, Plaintiff does not contest that

the two companies maintained this relationship after the POI and

throughout the Department’s investigation of the antidumping

petition.

In light of this clear and substantial evidence of “control,”

it is also reasonable for the Department to conclude that China

Steel could obtain and submit Yieh Loong’s sales data. See Ta Chen

Stainless Steel Pipe, Inc. v. United States, 24 CIT 841, 844 (2000)

(finding reasonable Commerce’s conclusion that respondent’s

operational control of its U.S. affiliate gave respondent access to

that affiliate’s business records) (“Ta Chen I”). The Court

therefore finds Commerce’s determination that China Steel was in a

position to obtain and submit downstream sales information from

Yieh Loong for the entire POI supported by substantial evidence and

in accordance with law. In addition, once Commerce has

appropriately determined that China Steel was affiliated with Yieh
Court No. 01-01040 Page 12

Loong and collapsed them into a single entity, it follows that

Plaintiff was required to submit downstream sales data for the

entire POI, consistent with the antidumping statute and the

applicable regulations, where the collapsed entity was in a

position to compel the evidence from Yieh Loong’s affiliates. See

id.

Accordingly, Plaintiff’s first argument, challenging

Commerce’s determination that CSC/YL was required to submit

downstream sales data for sales to Yieh Loong’s affiliates prior to

February 21, 2001, fails. In CSC/YL I, Plaintiff conceded that the

Department’s affiliation determination with respect to Yieh Loong

and China Steel was supported by substantial evidence and in

accordance with law. See CSC/YL I, 27 CIT at __, 264 F. Supp. 2d

at 1344 n.1. Plaintiff, nonetheless, challenged the temporal

effect of that determination on its downstream sales submission

requirements, because Plaintiff believed that China Steel and Yieh

Loong, and in turn, Yieh Loong’s affiliates, only became affiliated

on February 21, 2000. 27 CIT at __, 264 F. Supp. 2d at 1350.

Plaintiff again asserts this same argument on remand, citing five

agency determinations for the proposition that respondents do not

have to report pre-affiliation sales as affiliate sales. See Pl.’s

Comments at 8 (citing Pl.’s Br. at 20). None of those

determinations provide any support for Plaintiff’s stated

proposition. Consequently, Plaintiff’s reliance on the five
Court No. 01-01040 Page 13

determinations is misplaced. The Court therefore finds Plaintiff’s

first argument lacks merit.

Plaintiff’s second contention is that Yieh Loong did not

control its affiliates when Commerce distributed its

questionnaires, because the common chairman between Yieh Loong, YP

and Persistence resigned from that position in February 2001,

thereby extinguishing Yieh Loong’s ability to compel those specific

affiliates to submit the requested information. Plaintiff’s

contention fails for two reasons.10

First, Commerce’s affiliation determination does not rest

solely on its findings concerning the common chairman. Supra p. 5.

Instead, Commerce found, in addition to the common chairman, that

Yieh Loong was affiliated with Persistence and YP because Yieh

Loong, aware of the statutory definition of “affiliated parties,”

conceded affiliation with those two entities in its section A

questionnaire responses, and Yieh Loong and YP each own a minority

stock interest in one another. Id. While the fact that the common

chairman resigned after Commerce distributed its January

questionnaire may appear to cast doubt on the agency’s decision,

10
The record indicates that Commerce initially requested
downstream sales data from Plaintiff on January 4, 2001. CSC/YL
I, 27 CIT at ___, 264 F. Supp. 2d at 1345 (citation omitted).
The agency subsequently requested that data two additional times
on March 15, 2001 and April 17/18, 2001. 27 CIT at __, 264 F.
Supp. 2d at 1346-47. It further indicates that the common
chairman resigned from that position sometime during February
2001. Pl.’s Br. at 22.
Court No. 01-01040 Page 14

the Court may not substitute its judgment for that of the agency.

As Commerce ultimately bears the burden of weighing the evidence,

the Court need only determine whether the Department’s conclusions

are substantially supported by the record. Corus Staal BV v.

United States Dep’t of Commerce, 27 CIT __, __, 259 F. Supp. 2d

1253, 1260 (2003). The Court found Commerce’s affiliation

determination, in its entirety, supported by substantial evidence

in CSC/YL I. 27 CIT at __, 264 F. Supp. 2d at 1354. Accordingly,

Plaintiff’s attempts to confine Commerce’s support for its

affiliation determination to the common chairman are unpersuasive.

Second, and importantly, even though the common chairman

resigned from that position, he remained a member of the three

companies’ board of directors; this fact further supports, rather

than frustrates, Commerce’s affiliation determination under the

antidumping statute. Commerce relied on 19 U.S.C. § 1677(33) (F)

-(G) to support that determination. Subsections (F) and (G)

consider the following person(s) affiliated: “(F) [t]wo or more

persons directly or indirectly controlling, controlled by, or under

common control with, any person[,]” or “(G) [a]ny person who

controls any other person and such other person.” 19 U.S.C. §

1677(33)(F)-(G). The statute further indicates that the “person”

or “persons” “shall be considered to control another person if the

person is legally or operationally in a position to exercise

restraint or direction over the other person.” 19 U.S.C. §
Court No. 01-01040 Page 15

1677(33); see also Uruguay Round Agreements Act, Statement of

Administration Action, H.R. Doc. No. 103-316 at 838 (“SAA”);11 19

C.F.R. § 351.102(b) (stating that Commerce is precluded from

concluding that a person controls another unless their relationship

“has the potential to impact decisions concerning the . . . pricing

. . . of the subject merchandise”). The statute does not require

that the “person” hold the position of chairman of the board.

Rather, the “person” must be operationally in a position to

exercise restraint or direction over the respective companies. As

Plaintiff concedes that the former chairman remained a member of

the three companies’ board of directors, Case Brief of Yieh Loong

and China Steel Corporation before the U.S. Dep’t of Commerce, P.R.

Doc. 140, Pl.’s Ex. 14 at 11 n.2 (Jun. 22, 2001); see Pl.’s

Comments at 3, the former chairman’s continuation as a board

member, in the context presented here, satisfies this statutory

requirement. Cf. Ta Chen Stainless Steel Pipe, Ltd. v. United

States, 23 CIT 804, 813 (1999) (“The statute focuses on the

capacity to control, rather than on the actual exercise of

control.”) (citing Ferro Union, Inc. v. United States, 23 CIT 178,

192, 44 F. Supp. 2d 1310, 1324 (1999)). Accordingly, Commerce’s

11
The SAA represents “an authoritative expression by the
Administration concerning its views regarding the interpretation
and application of the Uruguay Round agreements . . . . [T]he
Administration understands that it is the expectation of the
Congress that future Administrations will observe and apply the
interpretations and commitments set out in this Statement.” SAA
at 656.
Court No. 01-01040 Page 16

conclusion that Yieh Loong was still in a position to compel its

affiliates to submit the requested information at the time Commerce

distributed its questionnaires is appropriately supported.

B. Affiliate Home Market Sales

Commerce may calculate normal value12 using sales by

affiliated parties if those sales account for more than five

percent of the respondent’s home market sales. 19 C.F.R. §

351.403(d). Specifically, that subsection states that:

[i]f an exporter or producer sold the foreign like
product through an affiliated party, the [Department] may
calculate normal value based on the sale by such
affiliated party. However, the [agency] normally will
not calculate normal value based on the sale by an
affiliated party if sales of the foreign like product by
an exporter or producer to affiliated parties account for
less than five percent of the total value (or quantity)
of the exporter’s or producer’s sales of the foreign like
product in the market in question . . . .

19 C.F.R. § 351.403(d). Thus, Commerce has discretion to use a

Plaintiff’s affiliate resale data in calculating normal value if

12
In conducting an antidumping duty investigation, Commerce
is required to determine whether the imported merchandise at
issue is sold or is likely to be sold in the United States at
LTFV. See 19 U.S.C. § 1673. To determine whether merchandise is
sold at LTFV, Commerce compares the price of the imported
merchandise in the United States to the normal value for the same
or similar merchandise in the home market. See 19 U.S.C. §
1677b(a). Normal value is defined as the comparable price for a
product like the imported merchandise when first sold (generally,
to unaffiliated parties) “for consumption in the exporting
country, in the usual commercial quantities and in the ordinary
course of trade and, to the extent practicable, at the same level
of trade as the export price or constructed export price.” 19
U.S.C. § 1677b(a)(1)(B)(i).
Court No. 01-01040 Page 17

CSC/YL’s sales to affiliates constitute at least five percent of

its total home market sales. Id.

In the Final Determination, the Department determined,

pursuant to 19 C.F.R. § 351.403(d), that Plaintiff’s sales to Yieh

Loong, YH, and YP constituted more than five percent of its home

market sales, or a significant percentage. See Final Determ., 66

Fed. Reg. at 49,621; Dep’t of Commerce Mem. from Patricia Tran,

Case Analyst, to File, The Use of Adverse Facts Available for China

Steel Corporation (China Steel) and Yieh Loong Enterprise Co., Ltd.

(Yieh Loong), C.R. Doc. 55, Def.’s Conf. Ex. 7 at 5 (Apr. 23,

2001). As a result, Commerce determined that Plaintiff was

required to submit its affiliates’ downstream sales information for

use in calculating its dumping margin. See Final Determ., 66 Fed.

Reg. at 49,621. Because Commerce included Yieh Loong’s own sales

data in Plaintiff’s total sales to affiliates calculation, however,

the Court could not review Commerce’s determination for compliance

with the five percent threshold. CSC/YL I, 27 CIT at __, 264 F.

Supp. 2d at 1366. Accordingly, the Court remanded the issue to the

Department for further consideration. Id.

On remand, Commerce concluded that Plaintiff’s aggregate sales

to affiliates significantly exceeded the five percent threshold

required in the agency’s regulations. Remand Determ. at 9-10. To

make that determination, because China Steel and Yieh Loong were a

single collapsed entity for purposes of calculating the dumping
Court No. 01-01040 Page 18

margin, Commerce calculated the total home market sales for both

China Steel and Yieh Loong separately and then added those two

figures together to calculate Plaintiff’s total home market sales.

See id. The agency then reported the total amount of sales China

Steel and Yieh Loong individually sold to each of their respective

affiliates in the home market. Id. at 9. In particular, Commerce

identified China Steel’s sales to China Steel Global Trading, China

Steel Chemical Corporation, YP, and YH. Id. Commerce also

reported Yieh Loong’s sales to its affiliates, including YH, YP,

Lien Kang, Persistence, and China Steel Global Trading. Id.

Commerce added those sales amounts together to calculate

Plaintiff’s total sales to affiliates. Id. at 10. The Department

divided that amount by the two companies’ total home market sales.

See id. at 9-10. The result substantially exceeded the five

percent threshold required by the agency’s regulations. Id. at 10.

The agency therefore concluded that it properly required CSC/YL to

report all downstream sales data. Id.

Plaintiff argues that Commerce continues to miscalculate the

extent of its affiliate resales, because the Department considers

“pre-affiliation” sales by Plaintiff to YP, YH, and Persistence as

sales to an affiliated party. Pl.’s Comments at 9. Accordingly,

Plaintiff again contends that Commerce’s determination on remand is
Court No. 01-01040 Page 19

not in accordance with law. Id. at 9-10.13

Substantial evidence supports Commerce’s conclusion.

Plaintiff’s sales to affiliates significantly exceeded the five

percent threshold required by the agency’s regulation, and

therefore, the Department’s determination that Plaintiff produce

all downstream sales information is in accordance with law. The

Court has reviewed the record evidence upon which Commerce relied

in making its decision. Remand Determ. at 9-10. In particular,

the Court examined the following sales data in the record: (1)

Plaintiff’s total home market sales data for both China Steel and

Yieh Loong, Letter from Ablondi, Foster, Sobin & Davidow, P.C., to

U.S. Sec’y of Commerce, C.R. Doc. 39 at Ex. B-17 (Apr. 3, 2001)

(“CSC’s Apr. 3 Response”) (providing China Steel’s total home

market sales data); Letter from Peter Koenig and Kristen Smith,

Ablondi, Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce,

C.R. Doc. 12 at Ex. 1 (Feb. 2, 2001) (indicating Yieh Loong’s total

home market sales data), (2) China Steel’s total sales to

affiliates in the home market, which include sales to China Steel

Global Trading Company, China Steel Chemical Corporation, YP, and

13
As discussed above in subsection A, Commerce properly
required Plaintiff to submit downstream sales data for the entire
POI. Plaintiff has not established that at the time of the
agency’s requests, CSC/YL, as a single collapsed entity, was not
in a position to compel Yieh Loong’s affiliates to submit the
requested information. Commerce therefore may use the downstream
sales data from the entire POI to calculate Plaintiff’s
affiliated party sales.
Court No. 01-01040 Page 20

YH, Letter from Peter Koenig and Kristen Smith, Ablondi, Foster,

Sobin & Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc. 52 at

§ A para. 1 (Apr. 23, 2001) (“CSC’s Apr. 23 Response”) (identifying

China Steel’s total sales to affiliates China Steel Global Trading

Company and China Steel Chemical Corporation in the home market),

Letter from Michael D. Panzera, Trial Attorney, U.S. Dep’t of

Justice, to Donald C. Pogue, Judge, U.S. Court of Int’l Trade, at

2-3, attach. 1-2 (Dec. 22, 2003) (identifying China Steel’s total

sales to affiliates YH and YP in the home market), and (3) Yieh

Loong’s total sales to its affiliates in the home market,

including, YH, YP, Lien Kang, Persistence, and China Steel Global

Trading, Letter from Peter Koenig and Kristen Smith, Ablondi,

Foster, Sobin & Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc.

12 at Ex. 2 (Feb. 2, 2001). The Court then reviewed Commerce’s

computation outlined immediately above. Therefore, the Court finds

the record supports Commerce’s determination that Plaintiff’s sales

to its affiliates in the home market significantly exceeded the

five percent threshold required by the Department’s regulation. As

such, Commerce’s determination that Plaintiff was required to

submit complete downstream sales data is in accordance with law.

C. Adverse Facts Available

In its initial determination, Commerce applied adverse facts

available, pursuant to 19 U.S.C. § 1677e(a)(2)(B), 1677e(b), to
Court No. 01-01040 Page 21

calculate Plaintiff’s dumping margin. Final Determ., 66 Fed. Reg.

at 49,620. Commerce’s decision to use adverse facts available was

based on its finding that Plaintiff “failed to cooperate to the

best of its ability” because China Steel repeatedly ignored

instructions to submit complete product characteristics and

accurate downstream sales data, and “never provided alternatives or

reasonable explanations for why it could not report all downstream

sales.” Id. at 49,622.

Commerce’s finding, however, neglected to explain or analyze

whether CSC/YL willfully decided not to cooperate or behaved below

the standard of a reasonable respondent. Rather, Commerce simply

repeated its facts available reasoning to support its adverse facts

available determination. Consequently, the agency’s determination

was not in accordance with law. 27 CIT at __, 264 F. Supp. 2d at

1360.14 The Court also ordered Commerce to examine Plaintiff’s

contentions that it experienced difficulty in gathering and

submitting the requested product characteristics and downstream

sales data, and identify the agency’s reasons for discounting

Plaintiff’s claims in making its “best of ability” determination,

14
In light of the Federal Circuit Court of Appeals’ recent
decision in Nippon Steel Corp. v. United States, 337 F.3d 1373,
1383 (Fed. Cir. 2003) (“[S]ection 1677e(b) does not by its terms
set a ‘willfulness’ . . . standard, nor does it require findings
of motivation or intent. Simply put, there is no mens rea
component to the section 1677e(b) inquiry.”) (emphasis supplied),
the Court rescinds its order directing Commerce to find that the
respondent acted willfully before imposing an adverse inference.
27 CIT at __, 264 F. Supp. 2d at 1372.
Court No. 01-01040 Page 22

because Plaintiff’s inability could render Commerce’s determination

unsupported by substantial evidence. See CSC/YL I, 27 CIT at __,

264 F. Supp. 2d at 1360-61 (citing Motor Vehicle Mfrs. Ass’n v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (citation

omitted)).

On remand, Commerce again concluded that Plaintiff failed to

act to the best of its ability. See Remand Determ. at 5-8. The

agency found that Plaintiff submitted sales data containing

significant deficiencies, rendering the sales data unuseable for

calculating the dumping margin, failed to timely provide complete

and accurate product characteristics and downstream sales

information, established a pattern of unresponsiveness, and was

capable of complying with its requests as evidenced by Plaintiff’s

assertion that the data were forthcoming. Id. at 5-7. Thus,

Commerce determined that Plaintiff behaved below the standard for

a reasonable respondent. Id. at 5-6.

Specifically, Commerce concluded that Plaintiff behaved below

the standard for a reasonable respondent by providing inconsistent

and incomplete data and explanations in response to the agency’s

three questionnaires as well as requesting extensions of time to

file complete responses, actions which indicated that the

information was kept in CSC/YL’s records and would be forthcoming.

See id. at 6-7 (citing CSC’s Apr. 3 Response, C.R. Doc. 39, Pl.’s

Conf. Ex. 6 § A paras. 3 (seeking an extension of time to file the
Court No. 01-01040 Page 23

“remaining” downstream sales information with Plaintiff’s

supplemental section D responses and further stating that “[i]t

goes without mention, that all supporting information will be fully

available for the Department’s review and verification”), 4

(indicating that product characteristics such as “overrun, prime,

carbon, yield strength etc. can be identified from the production

record, inventory record as well as the product code system . . .

while . . . paint, thickness, width, cut-to-length, pickled, edge

trim and patterns in relief can be identified with customers’

orders”), 5 (responding that “there is no record” of product

characteristics for some leeway products because China Steel’s

internal system does not record products that were not produced in

accordance with a customer’s specifications); CSC’s Apr. 23

Response, C.R. Doc. 52, Pl.’s Conf. Ex. 10 at 5-6 (stating that the

records containing the product characteristics of leeway products

are not “handy and available,” and expressly requesting the

opportunity “to refine the data submitted before . . . the final

determination”)). Furthermore, Commerce held that Plaintiff’s

submission of the requested data thirty-eight days after the

preliminary result also indicated behavior below the standard for

a reasonable respondent. Remand Determ. at 6. The Department

therefore concluded that the record contained substantial evidence

to support the application of an adverse inference. Id. at 8.

Commerce made two additional findings. First, with respect to
Court No. 01-01040 Page 24

the product characteristics data, because Plaintiff was given ample

opportunity to respond to the Department’s requests, and provided

inconsistent and inaccurate responses, Commerce found that

Plaintiff was not excused from providing complete and accurate

responses even though CSC/YL was unable to retrieve the requested

information in a timely manner. See Remand Determ. at 7 (citing

Fujian Mach. & Equip. Imp. & Exp. Corp. v. United States, 25 CIT

__, __, 178 F. Supp. 2d 1305, 1332 (2001) (stating Commerce’s

proposition there that “plaintiff’s lack of advanced computer

capabilities does not ‘entitle[] them to underreport and

affirmatively misstate [facts] during a review.’”)). Second, the

Department concluded that “Yieh Loong [wa]s in a position to compel

[its affiliates] to provide a response to the Department’s

questionnaire” as a result of the agency’s conclusion to collapse

Yieh Loong and China Steel, and its finding that Yieh Loong was

affiliated with YH, YP, and Persistence, and Yieh Loong with China

Steel. Remand Determ. at 7.

Plaintiff contests the Department’s decision on three separate

grounds. First, Plaintiff claims that before drawing an adverse

inference, Commerce is required to cite evidence demonstrating that

CSC/YL could have provided the requested information earlier than

when it was actually produced. See Pl.’s Comments at 1. Second,

Plaintiff argues that the agency again failed to address the

difficulties it experienced in gathering and submitting the
Court No. 01-01040 Page 25

requested data in accordance with the Court’s order. See Pl.’s

Comments at 2. Third, Plaintiff continues to argue, as in CSC/YL

I, that an adverse inference is inappropriate here with respect to

the downstream sales information because Plaintiff did not have

control or leverage over Yieh Loong’s affiliates to compel their

responses to the Department’s requests. See Pl.’s Comments at 4;

see Pl.’s Br. at 21-22. Plaintiff’s arguments lack merit.

The antidumping statute grants Commerce discretion to

determine whether the respondent in an investigation has “failed to

cooperate by not acting to the best of its ability to comply with

a request for information.” 19 U.S.C. § 1677e(b).15 After the

Court’s first decision in this matter, the Federal Circuit Court of

Appeals explained the “best of ability” standard in Nippon Steel

15
Title 19 U.S.C. § 1677e(b) provides:

If [Commerce] . . . finds that an interested party has
failed to cooperate by not acting to the best of its
ability to comply with a request for information from
[Commerce] . . ., the [agency] . . . in reaching the
applicable determination under this subtitle, may use
an inference that is adverse to the interests of that
party in selecting from among the facts otherwise
available. Such adverse inference may include reliance
on information derived from–
(1) the petition,
(2) a final determination in the investigation
under this subtitle,
(3) any previous review under section 1675 of this
title or determination under section 1675b of this
title, or
(4) any other information placed on the record.

19 U.S.C. § 1677e(b).
Court No. 01-01040 Page 26

Corp., 337 F.3d at 1381-84.16 “Compliance with the ‘best of its

ability’ standard is determined by assessing whether the respondent

has put forth its maximum effort to provide Commerce with full and

complete answers to all inquires in an investigation.” Id. at

1382. In other words, a respondent satisfies the statutory mandate

to act to the best of its ability when the respondent does “the

maximum it is able to do” in meeting Commerce’s requests for

information. Id.

To determine whether a respondent has not cooperated to the

best of its ability and draw an adverse inference under § 1677e(b),

Commerce must make two findings. Id. at 1382. The agency must

decide objectively whether a reasonable importer would have known

that the requested information was required to be kept and

maintained under the antidumping statute. Id. Second, Commerce

must determine whether this particular importer not only failed to

timely produce the requested information, but that the importer’s

failure to respond resulted from either the importer’s failure to

keep and maintain the requested information or to put forth its

maximum efforts to locate and acquire the requested information

from its records. Id. at 1382-83. The Federal Circuit stated the

16
Although a U.S. importer was the subject of the Federal
Circuit’s “best of ability” analysis, nothing in that decision
precludes the Court from applying its reasoning to a Taiwanese
exporter. Shandong Huarong Gen. Group Corp. v. United States,
slip. op. 03-135 at 35 n.18 (CIT Oct. 22, 2003) (extending the
Federal Circuit’s “best of ability” analysis to an exporter from
the People’s Republic of China).
Court No. 01-01040 Page 27

two required findings as follows:

First, it must make an objective showing that a
reasonable and responsible importer would have known that
the requested information was required to be kept and
maintained under the applicable statutes, rules, and
regulations. Second, Commerce must then make a
subjective showing that the respondent under
investigation not only has failed to promptly produce the
requested information, but further that the failure to
fully respond is the result of the respondent’s lack of
cooperation in either: (a) failing to keep and maintain
all required records, or (b) failing to put forth its
maximum efforts to investigate and obtain the requested
information from its records.

Id. (internal citation omitted). The Federal Circuit also limited

the Department’s ability to properly draw an adverse inference.

Commerce may only draw an adverse inference where the agency can

reasonably expect that the respondent should have provided more

information in its responses. Id. at 1383.

An adverse inference may not be drawn merely from a
failure to respond, but only under circumstances in which
it is reasonable for Commerce to expect that more
forthcoming responses should have been made; i.e., under
circumstances in which it is reasonable to conclude that
less than full cooperation has been shown.

Id.

Commerce’s remand conclusion here complies with this mandate.

First, with respect to the product characteristics data, Commerce,

initially, asked Plaintiff to produce that data for all products.

See Letter from Robert James, Program Manager, Int’l Trade Admin.,

to China Steel Corporation, P.R. Doc. 28 at B-6 to B-11 (Jan. 4,

2001). Plaintiff failed to provide a complete response. Commerce

then again asked for product characteristics data on March 15,
Court No. 01-01040 Page 28

2001, Final Determ., 66 Fed. Reg. at 49,620; to which Plaintiff

inconsistently responded that the information was obtainable from

its records, but some leeway products were not recorded in its

system. CSC’s Apr. 3 Response, C.R. Doc. 39, Pl.’s Conf. Ex. 6 §

A paras. 4-5. Finally, the agency sent a third request ordering

Plaintiff to fully report the product characteristics of leeway and

overrun merchandise. Final Determ., 66 Fed. Reg. at 49,620; Letter

Robert James, Program Manager, Int’l Trade Admin., to China Steel

Corporation, c/o Peter Koenig, Ablondi, Foster, Sobin & Davidow,

P.C., P.R. Doc. 99 at 1 (Apr. 17, 2001). In response, Plaintiff

stated that the product characteristics of leeway merchandise were

not handy or available. CSC’s Apr. 23 Response, C.R. Doc. 52,

Pl.’s Conf. Ex. 10 at 5. Plaintiff also requested additional time

to refine the product characteristics data and submit additional

information before the Department’s final decision. Id. at 6.

Plaintiff, however, failed to submit complete product

characteristics data in a timely manner.

Plaintiff also failed to completely and accurately respond to

Commerce’s request for affiliated downstream sales information.

Commerce initially requested that Plaintiff produce affiliated

downstream sales information if total sales to affiliates

constituted more than five percent of all home market sales.

Final Determ., 66 Fed. Reg. at 49,621. Plaintiff requested that

Commerce excuse it from production of this information, as
Court No. 01-01040 Page 29

Plaintiff believed that its affiliate sales were below the required

percentage. Id. Ten days later, Commerce denied Plaintiff’s

request and again sought all Plaintiff’s affiliate sales

information. Id. The agency subsequently repeated that request

twice. Id. at 49,620. Plaintiff responded that its affiliates

“could not provide complete and adequate data to match [its]

records within the Department’s deadlines.” CSC’s Apr. 3 Response,

C.R. Doc. 39, Pl.’s Conf. Ex. 6 § A para. 3. CSC’s Apr. 3 Response

also requested an extension of time to provide the remaining

information, insisting that the requested information would be

available before verification. Id. Plaintiff, however, failed to

timely produce complete downstream sales data.

In response to the Court’s remand order, Commerce set forth

its opinion as to what efforts Plaintiff could have put forth to

comply with the “best of its ability” standard and concluded that

Plaintiff did not meet that standard. It appears Commerce

concludes that a responsible and reasonable respondent would have

known that the product characteristics and downstream sales data

were required to be kept and maintained in accordance with the

statute, rules and regulations in light of the agency’s repeated

requests for complete and accurate submissions. See Remand Determ.

at 6-7 (concluding that Plaintiff behaved below the standard of a

reasonable respondent because “[t]he Department on numerous

occasions requested the physical characteristics of all subject
Court No. 01-01040 Page 30

merchandise” and despite Plaintiff’s computer difficulties,

Plaintiff’s “inability to retrieve the requested information within

the deadlines d[id] not excuse [it] from providing complete and

accurate information”). In fact, the record reveals that Plaintiff

maintained the requested data and eventually, albeit untimely,

produced information, which purportedly contained the deficient

downstream sales and product characteristics data. Accordingly,

the Court finds that Commerce made the requisite objective showing

that a reasonable and responsible importer would have known that

the requested data was required to be kept and maintained under the

applicable statutes, rules, and regulations.

Commerce also made the requisite second showing, although as

in Nippon Steel Corp., 337 F.3d at 1384, the Department here framed

its response as an objective inquiry. Commerce’s Remand

Determination concludes that Plaintiff was capable of providing the

requested information, but failed to accurately, completely, and

timely respond to the agency’s requests. Remand Determ. at 6-7;

Shandong Huarong Gen. Grp. Corp. v. United States, slip op. 03-135

at 36 (finding that plaintiffs did not put forth their maximum

efforts to produce the sales records requested because plaintiffs

submitted inaccurate responses). To support that conclusion, the

agency cites record evidence referencing Plaintiff’s repeated

statements that the requested information would be forthcoming.

See Remand Determ. at 6-7. For example, Commerce cites Plaintiff’s
Court No. 01-01040 Page 31

response stating that the downstream sales information would be

available for the Department’s review prior to verification, id. at

7, which was scheduled to commence for Yieh Loong and China Steel

on April 30, 2001 and May 7, 2001 respectively. Letter from Neal

Halper, Director, Office of Accounting, Int’l Trade Admin., to

Peter Koenig, Ablond[i], Foster, Sobin & Davidow, P.C., C.R. Doc.

49 at 1 (Apr. 19, 2001); Letter from Neal M. Halper, Director,

Office of Accounting, Int’l Trade Admin., to Peter Koenig, Ablondi,

Foster, Sobin & Davidow, P.C., C.R. Doc. 56 at 1 (Apr. 26, 2001).

Plaintiff, however, allegedly submitted complete downstream sales

data on May 30-31, 2001, Pl.’s Br. at 25; Commerce found that

submission untimely, Final Determ., 66 Fed. Reg. at 49,620, which

finding the Court sustained in CSC/YL I. 27 CIT at __, 264 F.

Supp. 2d at 1369. Such evidence supports Commerce’s determination

that CSC/YL was capable of providing the requested information, but

failed to make a timely and complete response. Moreover,

Commerce’s conclusion is consistent with the Court’s holding in

CSC/YL I that the record supported Commerce’s determination that

Plaintiff was capable of providing the requested data. See 27 CIT

at __, 264 F. Supp. 2d at 1360. Thus, the Court finds that

Commerce properly made the second finding.

As Commerce demonstrated that Plaintiff failed to cooperate to

the best of its ability and that factual finding is supported by

substantial evidence, the Court finds Commerce properly concluded
Court No. 01-01040 Page 32

that Plaintiff failed to act to the best of its ability.

Commerce’s decision to apply an adverse inference in calculating

the dumping margin here is therefore in accordance with law.

Contrary to Plaintiff’s first argument, Commerce was not

required to cite substantial evidence indicating that Plaintiff

could have provided the requested information earlier than when it

was actually produced. Neither the statute nor the agency’s

regulations require Commerce to make such a finding. Indeed, it is

Plaintiff who ultimately bears the burden of creating an accurate

record in an antidumping duty investigation. Ta Chen Stainless

Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1336 (Fed. Cir.

2002) (“Ta Chen II”) (quoting Zenith Elecs. Corp. v. United States,

988 F.2d 1573, 1583 (Fed. Cir. 1993) (“The burden of production

[belongs] to the party in possession of the necessary

information.”)). As Plaintiff failed to produce the requested

information in a timely manner, Plaintiff also has failed to meet

its burden of production. Therefore, the Court finds Plaintiff’s

first argument fails.

Plaintiff’s second argument, contending that the agency failed

to address the difficulties it experienced in gathering and

submitting the requested information in accordance with the Court’s

order in CSC/YL I, also fails. There, the Court ordered the

Department to “‘examine the relevant data and articulate a

satisfactory explanation’” identifying the agency’s “‘reasons for
Court No. 01-01040 Page 33

discounting Plaintiff’s claims.’” See 27 CIT at __, 264 F. Supp.

2d at 1361 (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. at 43). Commerce has satisfied the

Court’s order on remand.

In the Remand Determination, Commerce specifically relied on

particular questionnaire responses which directly describe the

difficulties Plaintiff encountered in gathering and submitting the

requested data to make its “best of ability” determination. E.g.,

See Remand Determ. at 6-7 (citing CSC’s Apr. 3 Response, C.R. Doc.

39, Pl.’s Conf. Ex. 6 § A para. 3 (describing Plaintiff’s

difficulty gathering and submitting information from YH and YP),

para. 5 (responding that “there may be chances that there is (sic)

no record” of product characteristics for some leeway products

because China Steel’s internal system does not record products that

were not produced in accordance with a customer’s specifications);

CSC’s Apr. 23 Response, C.R. Doc. 52, Pl.’s Conf. Ex. 10 at 5-6

(stating that “the order record behind leeway may be voluminous;”

that old orders are placed on tapes and require writing a specific

program to retrieve data in the database; that China Steel “has

already tried very hard to trace back the properties of leeway” and

employees “have been . . . tracing more than [ten] databases with

tapes back to 1994" to locate the requested product characteristics

data)).

Although Commerce’s reasons for discounting Plaintiff’s claims
Court No. 01-01040 Page 34

are not drawn with ideal clarity, the Remand Determination responds

to those claims. See Bowman Transp., Inc. v. Ark.-Best Freight

Sys., Inc., 419 U.S. 281, 286 (1974) (holding that courts may

“uphold a decision of less than ideal clarity if the agency’s path

may reasonably be discerned”) (citation omitted). With respect to

the product characteristics data, because Plaintiff was given

“ample” opportunity to respond to the Department’s requests, and

provided inconsistent and incomplete responses, Commerce found that

Plaintiff was not excused from providing complete and accurate

responses. See Remand Determ. at 7 (citing Fujian Mach. & Equip.

Imp. & Exp. Corp. v. United States, 25 CIT at __, 178 F. Supp. 2d

at 1332 (stating Commerce’s proposition there that “plaintiff’s

lack of advanced computer capabilities does not ‘entitle[] them to

underreport and affirmatively misstate [facts] during a

review.’”)). Because Plaintiff ultimately bears the burden of

creating an accurate record, Ta Chen II, 298 F.3d at 1336 (citing

Zenith Elecs. Corp. v. United States, 988 F.2d at 1583), because

Commerce granted Plaintiff almost four months to produce the

requested information, and because Plaintiff assured Commerce that

the data would be forthcoming, Plaintiff had the opportunity and

ability to submit complete and accurate responses. Therefore, with

respect to the product characteristics data, Commerce has provided

a satisfactory explanation for discounting Plaintiff’s claims.

The Department also found that “Yieh Loong [wa]s in a position
Court No. 01-01040 Page 35

to compel [its affiliates] to provide a response to the

Department’s questionnaire,” as a result of the agency’s conclusion

to collapse China Steel and Yieh Loong, and its decision that Yieh

Loong is affiliated with YH, YP, and Persistence. Remand Determ.

at 7. It can reasonably be inferred from this statement that

Commerce was responding to Plaintiff’s claim that China Steel was

unable to compel YH and YP to submit downstream sales data.

Because the Court sustained Commerce’s determination that China

Steel was in a position to compel the downstream sales data from

Yieh Loong’s affiliates by virtue of that company’s collapse with

Yieh Loong above in subsection A, Commerce’s statement concerning

the downstream sales information articulates a satisfactory

explanation for discounting Plaintiff’s claims.

As Commerce ultimately bears the responsibility of weighing

the evidence, the Court may not substitute its judgment for that of

the agency. See Corus Staal BV v. United States, 27 CIT at __, 259

F. Supp. 2d at 1260. Even if there is some evidence which detracts

from the agency’s conclusions, the Court need only determine

whether the Department’s conclusions are substantially supported by

the record. Id.; Olympia Indus., Inc. v. United States, 22 CIT

387, 389, 7 F. Supp. 2d 997, 1000 (1998) (citing Atl. Sugar, Ltd.

v. United States, 744 F.2d 1556, 1563 (Fed. Cir. 1984)). Because

the Court found Commerce’s “best of ability” determination

supported by substantial evidence above, the Court finds that
Court No. 01-01040 Page 36

Commerce properly articulated a satisfactory explanation for

discounting Plaintiff’s claims.

Finally, the Court finds unpersuasive Plaintiff’s third

argument that an adverse inference is inappropriate with respect to

the downstream sales data because Plaintiff lacks control over Yieh

Loong’s affiliates to compel their responses. In the instant case,

contrary to Plaintiff’s claim, Commerce determined on remand that

Plaintiff, as a collapsed entity, was in a position to compel Yieh

Loong’s affiliates to submit downstream sales data for the entire

POI. See Remand Determ. at 3-4, 7 (concluding that “Yieh Loong

[wa]s in a position to compel [its affiliates] to provide a

response to the Department’s questionnaire” as a result of the

agency’s finding that Yieh Loong was affiliated with YH, YP, and

Persistence, and the agency’s collapsing of Yieh Loong with China

Steel). The Court sustained that determination in subsection A

above, concluding that as a consequence of the control China Steel

maintained over Yieh Loong, the agency collapsing China Steel and

Yieh Loong into a single entity, and Yieh Loong’s affiliation with

YH, YP, and Persistence, Plaintiff was in a position to compel the

downstream sales information from Yieh Loong’s affiliates. Supra

pp. 10-12. Thus, the burden was on Plaintiff to show that it could

not compel Yieh Loong’s affiliates to provide the requested

information. CSC/YL has failed to meet that burden.17

17
Commerce has, however, refrained from applying adverse
facts available where the respondent could establish that it
Court No. 01-01040 Page 37

Similar to Ta Chen I, 24 CIT at 845, Plaintiff here simply

called and forwarded the Department’s questionnaire to YH. Letter

from Peter Koenig and Kristen Smith, Ablondi, Foster, Sobin &

Davidow, P.C., to U.S. Sec’y of Commerce, C.R. Doc. 43, Pl.’s Conf.

Ex. 8 at 2-3 (Apr. 10, 2001) (stating that China Steel “called [YH]

. . . for assistance and passed on . . . the Department[‘s]

request”). Plaintiff subsequently called YH again to urge that

company’s cooperation. Id. The record does not reveal any other

efforts Plaintiff undertook to acquire the requested information

attempted to acquire the requested information, but was unable to
compel its affiliate to produce that information. E.g., Roller
Chain, Other than Bicycle, from Japan, 62 Fed. Reg. 60,472,
60,476 (Dep’t Commerce Nov. 17, 1997) (notice of final results
and partial recission of antidumping duty administrative review)
(concluding that it was inappropriate to apply adverse facts
available where despite respondent’s efforts to acquire the
requested information, “it was not in a position to compel the
affiliated customer to produce the information requested by the
Department”); Certain Fresh Cut Flowers from Colombia, 63 Fed.
Reg. 5,354, 5,356 (Dep’t Commerce Feb. 2, 1998) (notice of
preliminary results and partial termination of antidumping duty
administrative review) (choosing not to apply an adverse
inference where respondent’s “exhaustive efforts at locating [the
requested information from an affiliate] . . . were futile.”);
Certain Cut-to-Length Carbon Steel Plate from Brazil, 63 Fed.
Reg. 12,744, 12,751 (Dep’t Commerce Mar. 16, 1998) (notice of
final results of antidumping duty administrative review)
(concluding that the application of an adverse inference was
inappropriate where respondent “did attempt to obtain . . .
information from its affiliate” and where the nature of the
parties’ affiliation was such that respondent could not compel
affiliate to provide the information); see also Certain Cut-to-
Length Carbon Steel Plate from Belgium, 63 Fed. Reg. 2,959, 2,961
(Dep’t Commerce Jan. 20, 1998) (notice of final results of
antidumping duty administrative review) (stating that the agency
“may resort to adverse facts available in response to
[respondent’s] failure to report [information from an affiliate]
unless [respondent] establishes that it could not compel its
affiliate to report [the information].”) (citation omitted).
Court No. 01-01040 Page 38

from YH, nor is there any record evidence demonstrating the

specific efforts Plaintiff took to compel the requested information

from YP and Persistence, the two other Yieh Loong affiliates. Such

actions do not demonstrate an inability to compel a response from

Yieh Loong’s affiliates. See Ta Chen I, 24 CIT at 845 (citing

Kawasaki Steel Corp. v. United States, 24 CIT 684, 694, 110 F.

Supp. 2d 1029, 1039 (2000) (finding that respondent’s letters and

oral requests for information from affiliate were insufficient to

show respondent cooperated to the best of its ability because

respondent simply acquiesced in affiliate’s refusal to provide

information). Thus, the Court finds Plaintiff’s third argument

lacks merit, as Plaintiff has failed to show that it could not to

compel Yieh Loong’s affiliates to produce the requested downstream

sales information.

D. Corroboration

Title 19 U.S.C. § 1677e(c) requires that Commerce corroborate

any adverse facts selected to calculate a dumping margin. In the

Final Determination, Commerce used the 29.14 percent facts

available dumping margin proposed in the Domestic Producers’

antidumping petition. See Issues and Decision Mem., P.R. Doc. 151,

Def.’s Ex. 8 at 14.18 Commerce selected this petition rate because

18
Commerce also noted that it was unable to corroborate the
Domestic Producers’ proposed adverse facts available rate of
87.06 percent. Issues and Decision Mem., P.R. Doc. 151, Def.’s
Court No. 01-01040 Page 39

it was the highest computed margin covering the subject merchandise

under the Harmonized Tariff Schedule. Id. The rate resulted from

a margin computation employing constructed value (“CV”) as the

normal value.19 Id. In calculating CV, the Domestic Producers used

their own cost of manufacturing (“COM”) data. Id. Because “the

Department knew of no sources to [directly] corroborate [the

Domestic Producers’] reported COM data,” Commerce compared that

data with Plaintiff’s COM data. Id. Commerce concluded that the

COM data submitted by Plaintiff was “reasonably close” to that

submitted by the Domestic Producers. Id. As such, Commerce found

the COM data, and in turn, the 29.14 margin rate contained in the

petition, sufficiently corroborated. Id. The Department concluded

that the 29.14 percent margin was adverse because “it reasonably

insures that [Plaintiff] does not benefit from its own lack of

cooperation.” Id.

Plaintiff asserts two arguments challenging Commerce’s

corroboration determination as not in accordance with law. First,

Plaintiff claims that Commerce applied a new standard of law in

corroborating the dumping margin. Because Commerce first

determined that CSC/YL’s COM data was “reasonably close” to the COM

data the Domestic Producers submitted, without defining or

Ex. 8 at 14.
19
Constructed value is calculated according to 19 U.S.C. §
1677b(e).
Court No. 01-01040 Page 40

explaining that standard, and then concluded that the petition

dumping margin was sufficiently corroborated, Plaintiff claims

Commerce’s corroboration determination is not in accordance with

law. See Pl.’s Br. at 31. Second, Plaintiff claims Commerce’s

conclusion that the two sets of data were “reasonably close” is not

in accordance with law, because an 8.6 percent difference exists

between the two sets of data. See Pl.’s Reply to Opp’n to Pl.’s

Mot. J. Agency R. at 22 (“Pl.’s Reply”). Plaintiff relies on 19

U.S.C. § 1677f-1(a)(2) and 19 C.F.R. § 351.413 to support its

argument. Id.20 Plaintiff claims that an 8.6 percent difference

is too great to be “insignificant” and therefore Commerce’s use of

its data to corroborate the Domestic Producer’s COM data is

prohibited. See id.

In response, Commerce argues that the agency properly

corroborated the secondary information used as adverse facts

available because Commerce used Plaintiff’s own COM data. Def.’s

Mem. in Opp’n to Pl.’s Mot. J. Agency R. at 41-42 (citing Ta Chen

II, 298 F.3d at 13[40]). Defendant Intervenor II adds that the

exhaustion doctrine precludes the Court’s review of Plaintiff’s

20
Title 19 U.S.C. § 1677f-1(a)(2) states that “[f]or
purposes of determining . . . normal value under section 1677b .
. . [Commerce] may . . . decline to take into account adjustments
which are insignificant in relation to the price or value of the
merchandise. Id. Section 351.413 of the agency’s regulations
defines the term “insignificant adjustment” as “any individual
adjustment having an ad valorem effect of less than 0.33
percent.” 19 C.F.R. § 351.413 (emphasis supplied).
Court No. 01-01040 Page 41

corroboration claims. Def.-Int. II’s Br. Opp’n to Pl.’s Mot. J.

Agency R. at 22 n.6. The Court will address the latter argument

first.

“The exhaustion doctrine requires a party to present its

claims to the relevant administrative agency for the agency’s

consideration before raising these claims to the Court.” Timken

Co. v. United States, 26 CIT __, __, 201 F. Supp. 2d 1316, 1340

(2002) (citation omitted). “There is, however, no absolute

requirement of exhaustion in the Court of International Trade in

non-classification cases.” Consol. Bearings Co. v. United States,

25 CIT __, __, 166 F. Supp. 2d 580, 586 (2001) (citation omitted).

Rather, Congress vested the Court with discretion to determine the

circumstances under which it is appropriate to require the

exhaustion of administrative remedies pursuant to 28 U.S.C. §

2637(d).21

“Concomitant with the request for values of judicial economy

and ‘administrative autonomy’ inherent in the application of the

exhaustion doctrine, McKart v. United States, 395 U.S. 185, 194

(1969) (citation omitted), lies a responsibility for the agency,

necessarily vested with control over the administrative

proceedings, to allow a sufficient opportunity to raise issues.”

Al Tech Specialty Steel Corp. v. United States, 11 CIT 372, 377,

21
Title 28 § 2637(d) states that “the Court of International
Trade shall, where appropriate, require the exhaustion of
administrative remedies.” Id.
Court No. 01-01040 Page 42

661 F. Supp. 1206, 1210 (1987). “Thus, in determining whether

questions are precluded from consideration on appeal, the Court

will assess the practical ability of a party to have its arguments

considered by the administrative body.” Id. (citations omitted).

For example, in Philipp Bros., Inc. v. United States, 10 CIT 76,

83-84, 630 F. Supp. 1317, 1324 (1986), the Court held that because

Commerce did not address the issue challenged for judicial review

until the final decision, plaintiff was not afforded the

opportunity to raise its objections at the administrative level.

Accordingly, the Philipp Bros., Inc. Court concluded that the

exhaustion doctrine did not preclude judicial review of the matter

presented for the first time. See 10 CIT at 84, 630 F. Supp. at

1324; see also LTV Steel Co. v. United States, 21 CIT 838, 869, 985

F. Supp. 95, 120 (1997) (finding that the exhaustion doctrine did

not preclude judicial review of respondent’s claim where respondent

did not have the opportunity to challenge the methodology used by

Commerce to countervail a worker assistance program because

Commerce failed to articulate the methodology it would use until

the final determination); SKF USA, Inc. v. United States Dep’t of

Commerce, 15 CIT 152, 159 n.6, 762 F. Supp. 344, 350 n.6 (1991)

(finding the exhaustion doctrine inapplicable because respondent

did not have an opportunity to contest Commerce’s recalculation of

foreign market value of respondent’s ball bearings, as the agency

did not reveal the results of the recalculation until the final
Court No. 01-01040 Page 43

determination); Am. Permac, Inc. v. United States, 10 CIT 535, 536

n.2, 642 F. Supp. 1187, 1188 n.2 (1986) (noting that the imposition

of the exhaustion doctrine would be inappropriate because the issue

did not arise until long after the comment period for the

preliminary results, and because Commerce could issue its final

decision at any time; as such, it was unclear whether plaintiffs

had a “definite” opportunity to raise their objection before

Commerce.) (citations omitted).

Here, Commerce’s statement that Plaintiff’s COM data was

reasonably close to the evidence submitted by the Domestic

Producers was first pronounced in the agency’s Final Determination.

Plaintiff did not have the opportunity to present its objections to

that statement at the administrative level. Moreover, it is clear

that Plaintiff has not prematurely resorted to the Court, as all

administrative remedies are now closed to Plaintiff. McKart v.

United States, 395 U.S. at 196-97. Accordingly, the exhaustion

doctrine does not preclude judicial review of Plaintiff’s

corroboration objections here, which objections the Court will now

discuss.

Where Commerce has demonstrated that it may properly apply an

adverse inference to determine the dumping margin, Commerce may

rely on secondary information from the petition, the final

determination, a previous review or any other information placed on

the record. 19 U.S.C. § 1677e(b). “When the [Department] . . .
Court No. 01-01040 Page 44

relies on secondary information rather than on information obtained

in the course of an investigation or review, the [agency] . . .

shall, to the extent practicable, corroborate that information from

independent sources that are reasonably at their disposal.” 19

U.S.C. § 1677e(c); see also 19 C.F.R. § 351.308(d) (same). To

“corroborate” means that “the [Department] will examine whether the

secondary information to be used has probative value.” 19 C.F.R.

§ 351.308(d). The agency may examine, but is not limited to, the

following “independent sources” in corroborating secondary

information: “published price lists, official import statistics and

customs data, and information obtained from interested parties

during the instant investigation or review.” Id.

To comply with the statute, “Commerce must assure itself that

the [dumping] margin it applies is [not] [ir]relevant . . . or

lacking a rational relationship” to the evidence presented in the

record. Ferro Union, Inc. v. United States, 23 CIT 178, 205, 44 F.

Supp. 2d 1310, 1335 (1999) (holding that Commerce cannot apply a

margin that has been discredited). Commerce has broad, but not

unbounded, discretion in determining what would be an accurate and

reasonable dumping margin where a respondent has been found

uncooperative. F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v.

United States, 216 F.3d, 1027, 1032 (Fed. Cir. 2000) (“Particularly

in the case of an uncooperative respondent, Commerce is in the best

position, based on its expert knowledge of the market and the
Court No. 01-01040 Page 45

individual respondent to select adverse facts that will create the

proper deterrent to non-cooperation with its investigations and

assure a reasonable margin. Commerce’s discretion in these

matters, however, is not unbounded.”) (“De Cecco”)). Commerce

cannot “‘overreach reality’” when calculating a dumping margin, in

that the rate must be a “‘reasonably accurate estimate of the

[plaintiff’s] actual rate, albeit with some built-in increase

intended as a deterrent to non-compliance.’” See Ta Chen II, 298

F.3d at 1340 (quoting De Cecco, 216 F.3d at 1032). Put

differently, the agency cannot impose “punitive, aberrational, or

uncorroborated margins.” De Cecco, 216 F.3d at 1032 (citation

omitted). The Court now reviews Plaintiff’s arguments in light of

these legal standards.

Contrary to Plaintiff’s first argument, Commerce did not

establish a new legal standard in corroborating the Domestic

Producers’ COM data with Plaintiff’s COM data. Rather, it appears

that Commerce made a factual conclusion that the Domestic

Producers’ COM data was rationally related to that provided by

Plaintiff and therefore sufficiently corroborated. See Bowman

Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. at 286

(holding that courts may “uphold a decision of less than ideal

clarity if the agency’s path may reasonably be discerned”)

(citation omitted). Commerce is permitted to make such factual

determinations in corroborating dumping margins. See De Cecco, 216
Court No. 01-01040 Page 46

F.3d at 1032 (“Commerce[] [has] discretion to choose which sources

and facts it will rely on to support an adverse inference when a

respondent has been shown to be uncooperative.”); see also Corus

Staal BV v. United States, 27 CIT at __, 259 F. Supp. 2d at 1260

(concluding that Commerce ultimately bears the responsibility of

weighing the evidence). As Plaintiff failed to cooperate with the

Department’s requests for information, Commerce was permitted to

rely on the petition margin, which used the COM data submitted by

the Domestic Producers, to support its adverse facts available

dumping margin. 19 U.S.C. § 1677e(b). Commerce also properly

corroborated the Domestic Producers’ COM data with Plaintiff’s own

COM data. See Ta Chen II, 298 F.3d at 1340 (upholding Commerce’s

selection of a dumping margin for an uncooperative respondent where

the margin was corroborated by the respondent’s own sales data); 19

C.F.R. § 351.308(d) (stating that Commerce may examine information

obtained from interested parties during the instant investigation

to corroborate secondary information). Commerce’s corroboration

determination is therefore in accordance with law.

The Court finds unpersuasive Plaintiff’s second argument that

Commerce’s “reasonably close” determination is not in accordance

with law because there is an 8.6 percent difference between the two

data sets. Plaintiff relies on 19 U.S.C. § 1677f-1(a)(2) and 19

C.F.R. § 351.413 to support its argument. Those two provisions

grant Commerce discretion to consider price or value adjustments to
Court No. 01-01040 Page 47

merchandise in calculating normal value under § 1677b. Supra note

20. Neither provision requires Commerce to make only insignificant

“adjustments” while corroborating antidumping margins. Moreover,

neither provision requires Commerce to apply or consider the

regulation’s prescribed percentage rate in its corroboration

determination. Plaintiff’s reliance on those two provisions is

therefore misplaced. As Plaintiff has failed to present any other

support for its second contention, Commerce’s determination that

the COM data produced by Plaintiff was reasonably close to that

provided by the Domestic Producers is in accordance with law.

III. Conclusion

For the reasons stated above, Commerce’s Remand Determination

in CSC/YL I, 27 CIT at __, 264 F. Supp. 2d at 1339, is affirmed in

its entirety. The Court also sustains Commerce’s corroboration

determination.

/s/ Donald C. Pogue

Judge

Dated: January 26, 2004
New York, New York