Case Information
*2 Before L OURIE , O’M ALLEY , and T ARANTO , Circuit Judges. O’Malley, Circuit Judge.
The Advanced Technology & Materials entity (“ATM”), comprised of Beijing Gang Yan Diamond Prod- ucts Company, Gang Yan Diamond Products, Inc., and other affiliated companies, appeals from a decision of the Court of International Trade (“CIT”) upholding the De- partment of Commerce’s (“Commerce”) determination in a first administrative review of an earlier-imposed anti- dumping order. [1] In that review, Commerce imposed an adjusted PRC-wide entity rate of 82.12% on subject goods imported by ATM. Diamond Sawblades Mfrs. Coal. v. United States ( CIT Decision ), 2015 Ct. Int’l Trade LEXIS 107 (Ct. Int’l Trade Sept. 23, 2015). Because the CIT did not err in upholding Commerce’s decision, we affirm.
I. B ACKGROUND
A. Basis for Investigations and Administrative Reviews
Pursuant to 19 U.S.C. § 1673, Commerce imposes an antidumping duty on foreign merchandise if: (1) it deter- mines that the merchandise “is being, or is likely to be, sold in the United States at less than its fair value,” and (2) the International Trade Commission (“ITC”) deter- mines that the sale of the merchandise at less than fair value materially injures, threatens, or impedes the estab- lishment of an industry in the United States. If an inter- ested party files a petition with Commerce on behalf of an industry alleging that foreign merchandise warrants the imposition of an antidumping duty under § 1673, Com- merce initiates an antidumping duty investigation. 19 U.S.C. § 1673a. As part of this investigation, Commerce calculates a “normal value” for the subject merchandise— the price at which the “foreign like product” is sold in the exporting country or in a representative country if, inter alia , the exporting country has a market situation that does not permit a proper comparison—so that it can compare the export price of the foreign merchandise with the normal value. Id. § 1677b.
If Commerce and the ITC conclude that the imports or sales of the subject merchandise are governed by § 1673, Commerce issues an antidumping duty order. Id. § 1673d(c)(2). The amount of the antidumping duty is “the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise.” Id. § 1673. If requested, Commerce con- ducts a yearly administrative review of the antidumping duty order and calculates a new antidumping duty rate. § 1675(a)(1)–(2).
B. Commerce’s Investigation into Diamond Sawblades
On May 3, 2005, Diamond Sawblades Manufacturers Coalition (“DSMC”) filed a petition on behalf of the do- mestic industry and workers producing diamond saw- blades regarding imports of diamond sawblades. Preliminary Determination of Sales at Less than Fair Value, Postponement of Final Determination, and Prelim- inary Partial Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People’s Republic of China ( Investigation Preliminary Determina- tion ), 70 Fed. Reg. 77,121, 77,121 (Dep’t of Commerce Dec. 29, 2005). In response to the petition, Commerce initiated an investigation on June 21, 2005. In its final deter- mination, Commerce found that diamond sawblades from the PRC were being, or were likely to be, sold in the United States at less than fair value. Final Determina- tion of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People's Republic of China ( Investigation Final Determination ), 71 Fed. Reg. 29,303, 29,303 (Dep’t of Commerce May 22, 2006). The ITC separately found that the importation of diamond sawblades from the PRC threatened a United States industry with material injury. Diamond Sawblades and Parts Thereof from China , Inv. No. 731- TA-1092, USITC Pub. 4559, 2015 ITC LEXIS 1140, at *3– 4 (Sept. 1, 2015) (Review).
In the Investigation Final Determination , Commerce acknowledged that, in proceedings involving non-market- economy (“NME”) countries, Commerce “begins with a rebuttable presumption that all companies within the country are subject to government control.” 71 Fed. Reg. at 29,307. Based on this presumption, Commerce assigns all exporters of the subject merchandise in a NME coun- try a single antidumping duty rate “unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate.” Id.
Commerce initially concluded that ATM had demon-
strated
de jure
and
de facto
absence of government control
and, thus, qualified for a separate rate.
Id.
at 29,307.
Commerce set the ATM duty rate at 2.50%. at 29,309.
DSMC appealed Commerce’s rate determination to the
CIT. The CIT remanded the separate rate determination
to Commerce for clarification of the test applied by Com-
merce and for an explanation regarding Commerce’s
treatment of the evidence of record.
Advanced Tech. &
Materials Co. v. United States
,
Specifically, Commerce found that the State-Owned Assets Supervision and Administration Commissions of the State Council of the PRC (“SASAC”), a Chinese gov- ernment agency, owned 100 percent of the China Iron & Steel Research Institute (“CISRI”) during the investiga- tion period, and CISRI held a majority share in AT&M (one of the five companies making up ATM). Id. CISRI placed four of its senior officials on AT&M’s board, and the other five board members were all nominated by CISRI. Id. Because the AT&M board was active in selecting the company’s management, Commerce conclud- ed that AT&M did not choose its own management auton- omously, rendering ATM part of the PRC-wide entity. ATM’s status as part of the PRC-wide entity meant that it did not qualify for a separate rate. The CIT affirmed Commerce’s conclusion, id. at 1345–53, and we affirmed the CIT’s judgment without opinion pursuant to our Rule 36, Advanced Tech. & Materials Co. v. United States , 541 F. App’x 1002 (Fed. Cir. 2013).
C. First Administrative Review Proceedings During the first administrative review, Commerce again considered whether ATM should receive a separate rate. Before the final decisions of the CIT and this court affirming Commerce’s finding that ATM failed to rebut the presumption of government control in the initial investigation, Commerce again found that ATM qualified for a separate rate. Diamond Sawblades and Parts Thereof from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review: 2009–2010 ( Initial Final Results ), 78 Fed. Reg. 11,143, 11,145 (Dep’t of Commerce Feb. 15, 2013). Commerce set the ATM duty rate at 0.15%. Id. at 11,145. After the CIT issued its decision confirming that ATM did not qualify for a sepa- rate rate in the initial investigation, Commerce asked for a voluntary remand in the first administrative review to reconsider its separate rate analysis in light of the CIT’s decision. See Diamond Sawblades Mfrs. Coal. v. United States ( Remand Redetermination ), Court No. 13-00078, slip op. 14-50 (Dep’t of Commerce Apr. 10, 2015), http://enforcement.trade.gov/remands/14-50.pdf.
On remand, Commerce concluded that ATM did not qualify for a separate rate because it failed to rebut the presumption of government control. Id. at 2–4. Com- merce referenced its analysis from the initial investiga- tion proceedings, which the CIT and this court affirmed, and concluded that, “based on the evidence on the record of this proceeding, there is no meaningful difference between the circumstances at issue in the less-than-fair- value investigation and this review . . . .” Id. at 3.
Because ATM failed to qualify for a separate rate, ATM was subject to the PRC-wide entity rate. id. The then-governing PRC-wide entity rate was 164.09%. Commerce concluded, however, that it was appropriate to update the PRC-wide entity rate in light of information it had received from ATM during the first administrative review. at 7–10. ATM had cooperated in the first administrative review, providing Commerce with addi- tional information regarding a portion of the PRC-wide entity that Commerce did not have when it first calculat- ed the PRC-wide entity rate. Commerce acknowledged that the sales and production data provided by ATM allowed it “to calculate a margin for an unspecified por- tion of the single PRC-wide entity.” at 8–9. Com- merce explained, however, that it needed “to determine a single rate for the PRC-wide entity”; i.e., a single rate that would apply to all companies that make up the PRC-wide entity, including ATM and the other 21 companies. [2] Id. Although Commerce had information from ATM—which made up an unknown percentage of the PRC-wide enti- ty—it did not have the necessary information “from the remaining unspecified portion of the PRC-wide entity to calculate a margin for the unspecified portion of the PRC- wide entity.” Id. Commerce also noted that it did not have “information on the record with respect to the com- position of the PRC-wide entity.” Id.
Because ATM only made up an unknown portion of the PRC-wide entity, Commerce rejected ATM’s argument that “the entire government-controlled PRC-wide entity should be given” the margin Commerce calculated when it initially gave ATM a separate rate. Id. at 9. Commerce also stated, “unlike the less-than-fair-value investigation, no part of the PRC-wide entity failed to cooperate to the best of its ability.” Id. Given these considerations, Com- merce decided to recalculate the PRC-wide entity rate— which would apply to ATM and all other members of the PRC-wide entity—by taking “a simple average of the previously assigned PRC-wide rate (164.09 percent) and the calculated final margin for [ATM] (0.15 percent),” which resulted in a new PRC-wide entity rate of 82.12%. [3] (footnote omitted). The CIT sustained Commerce’s recalculation of the PRC-wide entity rate and the application of the new PRC- wide entity rate to ATM. CIT Decision , 2015 Ct. Int’l Trade LEXIS 107, at *18–28. In considering Commerce’s statement that “no part of the PRC-wide entity failed to cooperate to the best of its ability,” the CIT rejected ATM’s argument that this amounted to a determination by Commerce of “‘full’ cooperation by the PRC-wide enti- ty.” Id. at *23. The CIT noted that ATM’s argument “depends on the extent to which [ATM’s] cooperation may reasonably be imputed to the remainder of the PRC entity.” Id. The CIT concluded that “substantial evidence of record does not support” reading Commerce’s statement to mean that the entire PRC-wide entity cooperated fully during the first administrative review; instead, the CIT interpreted Commerce’s statement to apply only to ATM’s cooperation, not that of all others who make up the PRC- wide entity. Id. at *23–24. The CIT also concluded that Commerce’s decision was a review of the PRC-wide entity rate within the meaning of 19 U.S.C. § 1675(a), not a review of the makeup of the PRC-wide entity. at *24. Based on this understanding and its review of the record, the CIT concluded that Commerce’s decision was not “unreasonable, unsupported by substantial evidence, or otherwise not in accordance with law.” at *27.
II. D ISCUSSION
We apply the same standard of review used by the
CIT in reviewing determinations made by Commerce.
AMS Assocs., Inc. v. United States
, 737 F.3d 1338, 1342
(Fed. Cir. 2013). We will uphold Commerce’s determina-
tion 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);
see also Dupont Teijin Films
USA, LP v. United States
,
ATM argues that the CIT and Commerce impermissi- bly applied the PRC-wide entity rate because it based that rate on adverse facts available (“AFA”). [4] Pursuant to 19 U.S.C. § 1677e, Commerce can use an inference “that is adverse to the interests of [a] party in selecting from among the facts otherwise available” when determining the party’s rate if it finds that the interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information” from Commerce. § 1677e(b)(1). ATM asserts Commerce could not apply the PRC-wide entity rate to ATM in the first administra- tive review because Commerce was not allowed to apply an AFA rate to a cooperating entity.
ATM specifically contends that, in accordance with 19 U.S.C. § 1677e(b), Commerce can apply adverse infer- ences only to a party that “has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority or the Commission.” 19 U.S.C. § 1677e(b)(1). Because Com- merce agreed that ATM cooperated during the adminis- trative review, ATM argues that Commerce cannot apply the PRC-wide entity rate from the investigation proceed- ings to ATM because the PRC-wide entity rate was calcu- lated using AFA. According to ATM, its cooperation in this administrative review and 19 U.S.C. § 1673d(c)(1)(B)(i) mandate that Commerce give ATM either an individual rate or an “estimated all-others rate” for parties not individually investigated. ATM also ar- gues that Commerce’s decision in this case will “elimi- nate[] any incentive for cooperation by the PRC-wide entity, which will be given AFA regardless of whether it cooperates or not. Such an outcome is neither in keeping with statutory requirements or sound policy.” Appellant’s Br. 24–25.
ATM’s position ignores the effect of its failure to rebut the presumption of government control. In Sigma Corp. v. United States , we considered Commerce’s decision to assign certain manufacturers a single country-wide rate for their antidumping duty rates. 117 F.3d 1401, 1405 (Fed. Cir. 1997). Commerce had concluded that, because the PRC is a NME country, “all commercial entities in the country are presumed to export under the control of the state, and that no manufacturer would receive a separate antidumping duty rate unless it could demonstrate that it enjoyed both de jure and de facto independence from the central government.” Id. We noted that Commerce “has broad authority to interpret the antidumping statute and devise procedures to carry out the statutory mandate.” We agreed that “it was within Commerce’s authority to employ a presumption of state control for exporters in a [NME country], and to place the burden on the exporters to demonstrate an absence of central government control.”
Since our decision in
Sigma Corp.
, we consistently
have sustained Commerce’s application of a rebuttable
presumption of government control to exporters and
producers in NME countries, such as the PRC.
See, e.g.
,
Changzhou Hawd Flooring Co. v. United States
, 848 F.3d
1006, 1009 (Fed. Cir. 2017) (noting that Commerce “pre-
sumes that each Chinese exporter and producer is state-
controlled, and thus covered by a single China-wide
antidumping-duty rate, but a firm may rebut the pre-
sumption”);
Michaels Stores, Inc. v. United States
, 766
F.3d 1388, 1390 (Fed. Cir. 2014) (“In NME proceedings,
Commerce begins with a rebuttable presumption that a
company operating within a NME is subject to state
control.”);
Changzhou Wujin Fine Chem. Factory Co. v.
United States
, 701 F.3d 1367, 1370 (Fed. Cir. 2012) (“In
proceedings involving [NME] countries, including China,
Commerce presumes that exporters and producers are
state-controlled, and assigns them a single state-wide
rate.”). If a company from the NME country rebuts the
presumption by showing its independence from state
control, it can qualify for a separate rate; if the company
fails to rebut the presumption, however, it receives the
single state-wide dumping rate.
See, e.g.
,
Michaels Stores
,
766 F.3d at 1390 (“Commerce therefore applies a single
country-wide antidumping deposit rate to
all
NME pro-
ducers and exporters, unless the producer, exporter, or
another interested party can prove through an adminis-
trative review process
(established by 19 C.F.R.
§ 351.213(b)) that the exporter or producer at issue is not
subject to government control and thus eligible for a lower
rate.”);
Changzhou Wujin
,
In the first administrative review, ATM cooperated
with Commerce and sought a separate rate, just as it
did—with initial success—in the investigation proceed-
ings.
Initial Final Results
, 78 Fed. Reg. at 11,145.
But Commerce ultimately concluded, in accordance with
the decisions rendered by the CIT and this court in the
investigation proceedings, that ATM failed to rebut the
presumption of government control.
Remand Redetermi-
nation
, slip op. 14-50, at 2–4. ATM thus received the
PRC-wide entity rate.
See Transcom
, 294 F.3d at 1373
(“Under the NME presumption, a company that fails to
demonstrate independence from the NME entity is subject
to the countrywide rate . . . .”). Commerce’s decision to
assign ATM the PRC-wide entity rate was fully in accord-
ance with our case law addressing the application of the
PRC-wide entity rate to companies that fail to show an
absence of government control.
Michaels Stores
, 766
F.3d at 1390;
Changzhou Wujin
,
The statutory framework, including 19 U.S.C. §§ 1673d and 1677e(b), is not to the contrary. We have explained that 19 U.S.C. § 1673d “applies on its face only to investigations, not periodic administrative reviews.” Albemarle Corp. v. United States , 821 F.3d 1345, 1352 (Fed. Cir. 2016). “The statute also explicitly applies only to market economy proceedings,” rather than NME pro- ceedings. at 1352 n.6. But since the statutory frame- work requires Commerce to employ the same methods for calculating a separate rate in periodic administrative reviews for market economies as it does in initial investi- gations, Commerce has adopted that statutory framework in NME proceedings as well. at 1352 & n.6.
Although Commerce generally applies the statutory
framework to administrative reviews involving a NME
country like the PRC, it continues to have “broad authori-
ty to interpret the antidumping statute and devise proce-
dures to carry out the statutory mandate.”
Sigma Corp.
,
The fact that a country-wide rate may have been cal-
culated using AFA does not change its applicability to a
NME entity that cooperated, but ultimately failed to
qualify for a separate rate. This court’s reasoning in
Transcom
, although addressing a slightly different factual
scenario, is instructive on this point. In that case, Trans-
com argued that Commerce improperly applied a best
information available (“BIA”)
[5]
rate to Transcom’s produc-
ers and suppliers because Commerce had failed to show
that the producers and suppliers had not cooperated with
Commerce’s investigation.
That argument sidesteps the core principle under- lying the NME presumption, because it proceeds from the unspoken assumption that the producers are independent of the NME entity, when in fact the NME presumption begins with the assump- tion that the producers are part of the NME entity until they prove otherwise. If the producers are assumed from the outset to be part of the NME entity, then Commerce’s conclusion that the NME entity is subject to a BIA-based rate logically re- quires Commerce to apply the same BIA-based rate to all other producers within the scope of the review that have not proved their independence of the state.
In this case, ATM similarly argues that § 1677e does
not allow Commerce to apply an AFA rate to a cooperat-
ing party. ATM asserts that Commerce calculated the
PRC-wide entity rate using AFA during the investigation
proceedings, so Commerce cannot apply the PRC-wide
entity rate to ATM after the first administrative review
because ATM cooperated in that review. But this argu-
ment “sidesteps the core principle underlying the NME
presumption.” Since the beginning of this first ad-
ministrative review, Commerce has acknowledged that
the PRC-wide entity is composed of numerous entities
that all received a PRC-wide entity rate of 164.09%.
Initial Final Results
, 78 Fed. Reg. at 11,145 & n.20.
Commerce’s NME presumption begins by assuming that
ATM is part of the PRC-wide entity unless it can prove
otherwise. Because ATM failed to rebut the presumption
of government control, Commerce’s conclusion that the
PRC-wide entity is subject to an AFA-based rate logically
requires Commerce to apply the same AFA-based rate to
all members of the PRC-wide entity that have not proven
their independence from the state, including ATM.
[6]
See Transcom
,
ATM tries to avoid this conclusion by latching onto Commerce’s statement in the Remand Redetermination that, “unlike the less-than-fair-value investigation, no part of the PRC-wide entity failed to cooperate to the best of its ability.” Remand Redetermination , slip op. 14-50, at 9. But ATM takes this sentence out of the context provid- ed by the remainder of Commerce’s decision. Commerce expressly found that the PRC-wide entity included ATM and 21 other companies . at 9–10. ATM attempts to distance itself from those companies by claiming that they are not affiliated with ATM or they do not make up part of the PRC-wide entity. But Commerce expressly found that they are part of the PRC-wide entity. Initial Final Results , 78 Fed. Reg. at 11,145 & n.20. Given the full context of Commerce’s opinion and its discussion in the Initial Final Results , we do not believe Commerce’s single statement overrides its findings regarding the makeup of the PRC-wide entity. Instead, we understand this statement as a recognition that ATM cooperated to the best of its ability in this first administrative review. Commerce did not address the cooperation—or lack thereof—of other companies that make up the PRC-wide entity.
ATM also attempts to avoid the PRC-wide entity rate
by arguing that the information supporting the PRC-wide
entity rate of 164.09% from the investigation proceedings
was not on the record of this administrative review.
According to ATM, the lack of evidence supporting the
calculation of the 164.09% rate renders Commerce’s
decision applying the PRC-wide entity rate to ATM un-
supported by substantial evidence. But this argument
again ignores the nature of the PRC-wide entity rate.
Commerce did not calculate a new separate rate for ATM
in this administrative review; it was applying the NME
presumption that ATM would receive the existing PRC-
wide entity rate unless it could show an absence of gov-
ernment control. As mentioned above, we have upheld
this method of applying the PRC-wide entity rate to any
company that does not qualify for a separate rate on
numerous occasions.
See Transcom
, 294 F.3d at 1373;
Changzhou Wujin
,
Our decision is not inconsistent with our decision in Albemarle . There, we considered an administrative review of antidumping duty rates for three companies from the PRC. See Albermarle , 821 F.3d at 1347–48. Commerce determined that all of the parties to the appeal were entitled to separate rates, so the central issue in- volved “the calculation of those separate rates.” at 1348. Rather than calculate a separate rate for each of the three companies in the administrative review, howev- er, Commerce merely carried forward the rates used from a previous administrative review and applied those as the separate rates for the administrative review at issue. See id. at 1347–51. We concluded that the record in that case did not support Commerce’s ability to carry forward the separate rates of the three companies from a previous administrative review to the administrative review at issue. id. at 1351–59.
But our decision in Albemarle acknowledged at the outset that, “[i]n proceedings involving [NME] countries, including China, Commerce presumes that exporters are state-controlled, and assigns them a single state-wide dumping rate .” at 1348 (emphasis added). Albemarle therefore drew a distinction between the calculation of separate rates for individual companies that qualify for such a rate and the application of the PRC-wide entity rate to all companies that do not so qualify. See id. at 1348, 1351–53.
Commerce’s action in this case also complies with the general admonition in Albemarle that administrative reviews should “be as accurate and current as possible.” 821 F.3d at 1356 (quoting Allegheny Ludlum Corp. v. United States , 346 F.3d 1368, 1373 (Fed. Cir. 2003)). In this review, Commerce used the information it received from ATM to recalculate the PRC-wide entity rate so that it would reflect the most recent information it had re- ceived from members of the PRC-wide entity. Remand Redetermination , slip op. 14-50, at 9. Commerce acknowledged that it did not have sufficient information from all members of the PRC-wide entity to allow it to calculate “a margin for the unspecified portion of the PRC-wide entity,” but it accounted for the new infor- mation it received from ATM by taking an average of the two calculated rates and reducing the PRC-wide entity rate from 164.09% to 82.12%. Commerce’s actions are supported by substantial evidence and are not contrary to law.
III. C ONCLUSION
A party in a NME country, such as ATM, must coop-
erate with Commerce if it hopes to receive a separate rate
rather than the single rate applied to the country-wide
entity. But, if the party, despite its cooperation, fails to
rebut the presumption of government control, the party
remains part of the country-wide entity and therefore
receives the country-wide entity rate. In other words, the
fact of cooperation may help an entity in a NME country
seek a reduction of the country-wide rate, as it did here,
but it does not, without more, save it from that rate. As
discussed above, we have reaffirmed this proposition
numerous times since
Sigma Corp. Transcom
, 294
F.3d at 1373;
Changzhou Wujin
, 701 F.3d at 1370;
Michaels Stores
,
For the foregoing reasons, we affirm the CIT’s deci- sion sustaining Commerce’s application of the recalculat- ed PRC-wide entity rate to ATM.
AFFIRMED C OSTS No costs.
Notes
[1] This appeal is related to the appeal in Diamond Sawblades Manufacturers Coalition v. United States ( Diamond Sawblades II ), Case Nos. 2016-1254, -1255, also decided today. Both opinions involve administrative reviews of the antidumping duty order Commerce issued after its investigation into the potential dumping of diamond sawblades and parts thereof from the People’s Republic of China (“PRC”). This opinion addresses Com- merce’s first administrative review of the antidumping duty rate, covering the period 2009–2010, and the opinion in Diamond Sawblades II addresses the second adminis- trative review, covering the period 2010–2011.
[2] As acknowledged in the Remand Redetermination , the PRC-wide entity comprised twenty-one other compa- nies, aside from ATM, that also had failed to demonstrate a lack of government control. at 10. The other twen- ty-one companies did not cooperate in the first adminis- trative review.
[3] Neither party challenges Commerce’s decision to take a simple average of the two rates as its method for recalculating the PRC-wide entity rate based on the information it had before it. We therefore do not address the reasonableness of that decision.
[4] During oral argument, ATM clarified that it does not challenge Commerce’s ability to apply a PRC-wide entity rate under the statutory framework. When asked whether it was asserting that Commerce cannot use a PRC-wide entity rate, as amici believed it was, ATM responded, “No. We do not think you need to reach that in this case.” Oral Arg. at 2:19–2:29, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20 16-1253.mp3.
[5] ATM explains that BIA is “the older term for AFA.” Appellant’s Br. 28. Indeed, BIA “was the precur- sor to the current ‘adverse inference’ from ‘facts otherwise available’ rule.” Ta Chen Stainless Steel Pipe, Inc. v. United States ,298 F.3d 1330 , 1339 (Fed. Cir. 2002).
[6] ATM points to the CIT’s decision in
China Manu-
facturers Alliance, LLC v. United States
as supplemental
authority in support of its position.