Zhejiang Machinery Import & Export Corp. v. United States, 521 F.Supp.3d 1345

Background

Zhejiang Machinery Import & Export Corp. (ZMC) sought a separate antidumping (AD) rate in the 2016–2017 administrative review for tapered roller bearings exported from the PRC; Commerce presumes government control in NME proceedings unless rebutted.
ZMC is owned by Zhejiang Sunny I/E Corp. (Sunny); Sunny’s Articles list Sunny’s labor union as the nominal majority shareholder because the employee stock ownership committee (ESOC) lacks legal personhood under Chinese law.
ZMC submitted a revised translation of the ESOC Articles during the review; Commerce initially rejected that translation as untimely and denied a separate rate, applying the PRC-wide AD rate (92.84%).
The Court (in Zhejiang I) remanded, finding Commerce had abused its discretion by not considering the corrected translation and by failing to explain how the ESOC and the labor union could be connected for purposes of potential government control.
On remand Commerce accepted the revised translation, reexamined the record, and concluded that overlapping membership between Sunny’s labor union and the ESOC, together with the ACFTU’s influence, created a potential for GOC control; Commerce again denied a separate rate.
The Court affirmed Commerce’s Remand Results, holding Commerce complied with the remand and that its finding of potential de facto government control over ZMC was supported by substantial evidence.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce complied with the remand by considering ZMC’s revised translation	Commerce improperly rejected the corrected translation and failed to consider its effect	On remand Commerce accepted the revised translation and adequately reconsidered the record	Court: Commerce complied with remand and accepted the revised translation
Whether overlap of ESOC and labor-union membership supports potential GOC de facto control	Overlap is insufficient; ESOC is separate and members act individually, so union influence does not extend to non-union ESOC actions	Overlap plus Article 20 and ACFTU authority show a potential channel for GOC to influence ESOC and Sunny’s governance	Court: Substantial evidence supports potential control via overlapping membership and ACFTU influence
Proper legal standard: must Commerce show actual control or potential control to deny a separate rate	Commerce effectively imposes an irrebuttable presumption, demanding proof of actual control	Commerce applies the settled standard that potential de facto control suffices; burden is on respondent to rebut	Court: Commerce applied correct standard—potential control is sufficient
Whether Commerce had to analyze ESOC members’ actions separately as ESOC members vs union members	Commerce should have examined member actions separately; overlapping membership does not prove coordinated action	Separating roles is impracticable and overlapping record evidence supports affiliation and potential control	Court: Commerce reasonably relied on the overlap and need not parse each individual’s role separately

Key Cases Cited

Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir. 2015) (NME separate-rate presumption and rebuttal)
Shandong Rongxin Imp. & Exp. Co. v. United States, 331 F. Supp. 3d 1390 (CIT 2018) (describing separate-rate de facto indicators)
AMS Assocs. v. United States, 719 F.3d 1376 (Fed. Cir. 2013) (four-factor de facto control test)
Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 1997) (potential, not actual, control suffices)
Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978 (Fed. Cir. 1994) (Commerce may draw reasonable inferences despite conflicting evidence)
Universal Camera Corp. v. NLRB, 340 U.S. 474 (U.S. 1951) (substantial-evidence review principles)
NTN Bearing Corp. of Am. v. United States, 127 F.3d 1061 (Fed. Cir. 1997) (product context for TRBs)
Beijing Tianhai Indus. Co. v. United States, 106 F. Supp. 3d 1342 (CIT 2015) (review for compliance with remand orders)