In а review of an antidumping order, the Commerce Department determined that two Hong Kong resellers of tapered roller bearings from the People’s Republic of China (“PRC” or “China”) were subject to a dumping margin calculated using the “best information available” (“BIA”). Transeom, Inc., which purchased tapered roller bearings from the two Hong Kong resellers for importation into, this country, challenged Commerce’s determination before the Court of International Trade, which upheld Commerce’s decision. We agree with the Court of International Trade that Commerce provided the degree of notice required by statute and regulation, and that the use of a BIA-based antidumping rate was nоt unlawful.
r
A
In an antidumping investigation covering goods exported from a country with a market-based economy, Commerce sets individual antidumping duty rates for investigated companies. Entries from other companies are subject to an “all others” rate, which is typically computed as a weighted average of the individual rates. Thereafter, a company is subject to either its individual rate or the all others rate unless the rate is changed as a result of an administrative review of the dumping order conducted pursuant to 19 U.S.C. § 1675. An interested party, typically a member of the affected domestic industry, may request a review of a particular exporter if it believes the current-rate for that exporter is too low. Conversely, an exporter may request a review of its own exports if it believes its rate is too high.
Before 1991, Commerce used the combination of individual rates and an all others rate for antidumping investigations of imports not only from market economy countries, but also - from countries. with nonmarket economies (“NMEs”) such as China. In 1991, however, Commerce reversed course and decided that individual rates were not appropriate in an NME setting.
See Iron - Construction Castings From the People’s Republic of China; Final Results of Antidumping Duty Administrative Review,
56 Fed.Reg. 2742, 2744 (Jan. 24, 1991);
Final Determination of Sales at Less than Fair Value: Sparklers From the People’s Republic of China,
56 Fed.Reg. 20,588, 20,589 (May 6, 1991). Instead, Commerce determined that NME exporters would be subject to a single, countrywide antidumping duty rate unless they could demonstrate legal, financial, and economic independence from the Chinese government (referred to by Commerce as “the NME entity”).
This court upheld the application of this “NME presumption” in
Sigma Corp. v. United States,
B
In 1986, Commerce launched an anti-dumping investigation of Chinese-manu
The final results of the first two annual reviews, which covered the period from February 1987 to May 1989, were published on January 2, 1991. In those reviews, Commerce had not yet begun the practice of applying the NME presumption. The reviews, which covered only Premier, left intact both Premier’s antidumping duty rate of 0.97% and the all others rate of 2.96%. Commercе also established a “new shipper rate” of. 0.97% for exporters whose first shipment from China occurred after May 31, 1989. Final Results of Anti-dumping Duty Administrative Reviews: Tapered Roller Bearings and Parts Thereof From the People’s Republic of China, 56 Fed.Reg. 66 (Jan. 2,1991).
In the third administrative review, which covered the period from June 1989 to May 1990, Commerce changed its methodology for setting rates. In response to requests from various Chinese exporters, Commerce established eight company-specific dumping margins. Commerce also explained that it was abandoning its use of the new shipper rate. Instead, Commerce stated that all shippers not having an individual rate would be subject to the all others rate, which would be еqual to the highest rate for any reviewed firm and adjusted accordingly in each successive administrative review. Commerce therefore changed the rates for all Chinese exporters of tapered roller bearings, even though some of the affected companies were not listed in the notice of initiation for the review. Final Results of Antidumping Duty Administrative Review: Tapered Roller Bearings and Parts Thereof From the People’s Republic of China, 56 Fed. Reg. 67,590 (Dec. 31,1991).
On appeal of the third administrative review, the Court of International Trade held that Commerce could not use the all others rate to adjust dumping margins for companies outside the scope of the review.
UCF Am. Inc. v. United States,
Before the completion of judicial review of the results of the third administrative review, Commerce initiated the fourth, fifth, and sixth administrative reviews, covering June 1990 through May 1993. In the notices of initiation for each of those reviews, Commerce listed 43 companies
Despite the court’s disapproval of a single countrywide rate in UCF II, Commerce persisted. It announced that the PRC rate would be applicable to all exporters unless they had demonstrated their independence from the NME entity. Commerce stated that the NME presumption applied to a company whether or not it was named in the notice of initiation for a review and whether or not it had received a questionnaire from Commerсe. Commerce also stated that non-Chinese exporters of tapered roller bearings would be subject to the rates applicable to their Chinese suppliers.
During the fourth, fifth, and sixth review periods, Transcom had entries from companies that, although not listed in the notices of initiation for those reviews, were subject to the PRC rate. Transcom appealed. The Court of International Trade, which had previously struck down the use of the PRC rate in
UCF II,
upheld Commerce’s determinations in the fourth, fifth, and sixth reviews “in the interest of efficient administration of the dumping law to NMEs,” citing this court’s endorsement of the NME presumption in the
Sigma
case.
Transcom, Inc. v. United States,
This court reversed, although not with respect to the use of the NME presumption itsеlf. Instead, we held that because Transcom’s exporters were not named in the notices of initiation, their rates could not be adversely affected.
Transcom, Inc. v. United States,
C
The seventh administrative review of the antidumping order, the one at issue in this ease, was also initiated prior to Commerce’s announcement of a single PRC rate for tapered roller bearings, which was first published in the Federal Register in August 1995.
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China; Preliminary Rеsults of Antidumping Administrative Reviews,
60 Fed. Reg. 44,-302, 44,303 (Aug. 25, 1995). On June 7, 1994, Commerce published a notice of opportunity to request a review of the tapered roller bearing antidumping order for the seventh administrative review period, which covered June 1993 to May 1994. In response, the Timken Company requested a review of 101 specific companies, both in China and in Hong Kong, as well as “all merchandise covered by the order, from whatever source.” Commerce informed the Chinese government of the review and requested information regarding all companies, including third parties, that exported tapered roller bearings from China. On August 24, 1994, Commerce initiated the seventh administrative review, specifically naming the 101 cоmpanies listed by Timken.
Initiation of Antidumping Duty Administrative Revieivs and Request for Revocation in Part,
59 Fed.Reg. 43,537, 43,538-39 (Aug. 24, 1994). The notice also stated that “[a]ll other exporters of tapered roller bearings are conditionally covered by this review.”
Id.
at 43,539. Commerce sent a copy of the notice of initiation and the questionnaires to the Chinese government in December 1994, requesting that it forward the questionnaires to the companies named in the notice. In that
Commerce published the final results of the review on February 11, 1997. At that time, Commerce established' individual rates for sevеral companies, as well as adjusting the PRC rate to 25.56% for those companies that failed to demonstrate their independence from the NME entity. Commerce also continued its practice of assigning rates for 'third-country exporters of Chinese tapered roller bearings based on the rates assigned to their Chinese suppliers. Tapered, Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China; Final Results of Antidumping Duty Administrative Review and Revocation in Part of Antidumping Duty Order, 62 Fed.Reg. 6189 (Feb. 11,1997).
The PRC rate assigned in the seventh administrative review was based on the “best information available” or “BIA.” Commerce is permitted to use BIA “whenever a party or any other person refuses or is unаble to produce information requested in a timely manner and in the form required, or otherwise significantly impedes an investigation.” 19 U.S.C. § 1677e(c) (1988). While BIA-based rates aré intended to be adverse, the central purpose of BIA is not to punish parties.
See Nat’l Steel Corp. v. United States,
Transcom appealed Commerce’s determination. Specifically, the company challenged the antidumping margins as they applied to two of its Hong Kong resellers from which it imported Chinese-produced tapered roller bearings during the review period. The two resellers were Direct Source International and Gold Hill International Trading & Services Co. Neither company was named either ’in Timken’s request or in the notice of initiation for the seventh administrative review. Transcom claimed that because of the lack of specific notice, the entries from those companies were not subject to the review at all, much less subject to a BIA-based rate.
The Court of International Trade affirmed Commerce’s determination.
Transcom, Inc. v. United States,
As to whether it was appropriate to apply a BIA-based antidumping duty rate to Transcom’s suppliers, the court agreed with Commerce that by “conditionally covering]” Transcom’s Hong Kong suppliers and their Chinese producers, Commerce in effect had requested information from those parties, which did not provide the requested information. Because those parties did not provide information neces
II
On appeal, Transcom argues that the statutes and regulations that were in effect at the time of the seventh administrative review required that a company be specifically named in the request for review and the notice of initiation in order to be subject to the results of the review. Trans-com contends that it was improper for Timken to request that the administrative review encompass not only the 101 companies it named in its request, but also “all merchandise covered by the [antidumping] order, from whatever source.” Transcom similarly argues that it was improper for Commerce in the Notice of Initiation to include not only the named companies, but also the statement that “[a]ll other exporters of tapered roller bearings are conditionally covered by this review.” In addition, Transcom argues that the reference to exporters that were “conditionally covered” by the review did not provide sufficient notice that the products sold to Transcom by Transcom’s suppliers and resellers could be within the scope of the review and thus subject to antidumping duties.
A
The statute that governed administrative reviews at the time of the initiation of the administrative review at issue in this case was the 1988. version of 19 U.S.C. § 1675(a). It provided that Commerce must conduct an administrative review of an antidumping order “if a request for such a review has been received and after publication of notice of such review in the Federal Register.” The regulation that applied at the time was more detañed. It stated that an “interested party ... may request in writing that the Secretary conduct an' administrative revievv of specified individual producers or resellers.” 19 C.F.R. § 353.22(a) (1994).
Transcom argues that the statute and the regulation require a requester to identify by name all companies for which review is sought, and that a request that is generic in whole or in part, such as the request submitted by Timken, is improper. Transcom further argues that any review conducted in response to a request filed under section 353.22(a) of the 1994 regulation is limited to those companies that are specifically named in the request.
Thе Court of International Trade rejected Transcom’s argument, and so do we. The governing statute, 19 U.S.C. § 1675(a) (1988), does not limit Commerce’s administrative review to those companies specifically named in the interested party’s request for review. Furthermore, although the applicable regulation requires specificity in a request for review,
see 19
C.F.R. § 353.22(a) (1994), it places no such limitation on Commerce. To the contrary, the regulation authorizes Commerce to define the scope of the review independent of the request.
Id.
§ 353.22(c). Accordingly, we see no statutory or regulatory basis for ruling that when Commerce conducts an administrative review in response to-a request from an interested party, thе scope of the review is limited to the scope of the interested party’s request.
See UCF I,
Section 353.22 was adopted in response to a statutory chаnge that was designed to reduce the burden on Commerce of conducting annual administrative reviews of antidumping orders. Prior to 1984, 19 U.S.C. § 1675(a) provided for a mandatory annual review of all dumping orders.
See Floral Trade Council v. United States,
B
In
Transcom, Inc. v. United States,
There is nothing unclear about the reference in the Notice of Initiation to “[a]ll other exporters of tapered roller bearings,” particularly since the list of companies to which the “all other exporters” clause was appended included both Chinese producers and Hong Kong resellers of tapered roller bearings. Transcom focuses on the statement in the Notice of Initiation that the class of “all other exporters” would be “conditionally covered,” and contends that the term “conditionally covered” was insufficient to give notice to Transcom’s Hong Kong resellers and their Chinesе producers that they were within the scope of the administrative review.
Although Commerce had used the “conditionally covered” language prior to the notice of initiation in this case, see, e.g., Initiation of Antidumping and Countervailing Duty Administrative Reviews, 59 Fed.Reg. 2593 (Jan. 18, 1994), Commerce did not actually publish a description of the way in which its conditional coverage operated until well after the time period for responding to the seventh administrative review had passed, see, e.g., 61 Fed. Reg. 65,527, 65,545 (Dec. 13, 1996). According to Transcom, Commerce’s failure to explain the operation of the “conditional coverage” regime prejudiced Transcom’s ability to protect its interests.
In this respect, this case differs significantly from our previous
Transcom
decision,
Based on the language of the notice of initiation, Transcom had at least two options if it wished to avoid the possible adverse effects of an unfavorable review of its suppliers: it could have protected itself either by ensuring that its Chinese suppliers participated in the review and proved their entitlement to separate rates, or it could have ensured that its Hong Kong resellers demonstrated their entitlement to intermediate country rates under 19 U.S.C. § 1677b(f) (1988). Thus, while Commerce certainly could have been more explicit about the conditional nature of the review, Transcom cannot credibly say that it was surprised by the inclusion of its entries in the administrative review and left without recourse to protect itself against an unfavorable antidumping duty.
Transcom also contends that Commerce’s use of the phrase “conditionally covered” made it impossible for Commerce to notify the Customs Service as to the scope of the review in the manner specified by the regulations. Commerce is required to notify Customs as to the scope of a review upon receiving a timely request for review. 19 C.F.R. § 353.22(e)(2) (1994). Customs uses that informatiоn for liquidation purposes: either to assess anti-dumping duties for those items within the scope of the review, or to collect duties at the cash deposit rate for those items not within the scope of the review. Transcom asserts that section 353.22(e)(2) imposes a requirement that Commerce notify Customs of the scope of the review based on the request for review. Thus, according to Transcom, the scope of the review must be determinable from the request alone. For that reason, Transcom contends, Commerce violated the regulation by using conditional notice, which did not allow Commerce to provide liquidation information to Customs until after the review was completе.
That argument is without merit. Section 353.22(e)(2) 'requires only that after receiving a request for review, Commerce must provide Customs with information describing the scope of the review. For
In sum, considering the language of the notice of initiation and Commerce Department policy, we believe that a “reasonably informed party” in Transcom’s position,
Transcom,
Ill
Transcom next argues that, even assuming all exporters of tapered roller bearings from China were subject to the administrative review, Commerce unlawfully used BIA to calculate the dumping margins of its imported products.
The governing statute, 19 U.S.C. § 1677e(c) (1988), permits the use of BIA only when a party “refuses or is unable to produce information requested in а timely manner and in the form required, or otherwise significantly impedes an investigation.” We have interpreted that statutory language to require noncompliance with an information request before resort to the best information available rule is justified.
See Olympic Adhesives,
While it is true that Transcom’s Hong Kong suppliers, Direct Source and Gold Hill, were not sent questionnaires, the identity of the Chinese producers who sold products to Direct Source and Gold Hill for resale to Transcom has not been disclosed, and there is therefore no way to determine on this record whether the Chinese producers of Transcom’s products were among those companies that were listed in the notice of initiation and were sent questionnaires. In Commerce’s view,
Commerce’s position, as announced in the final results of the present administrative review, is as follows: (1) it is Commerce’s policy to treat all exporters in an NME country as part of the single state-controlled entity unless they prove that they are independent of government control; (2) because some of the companies specifically named in the seventh administrative review did not establish their independence from the state-controlled entity, Commerce regarded the state-controlled entity as part of the review; (3) because of the failure of those companiеs to provide the requested information, Commerce based the antidumping duty for the state-controlled entity on BIA; (4) because Transcom’s producers were not shown to be independent of the state-controlled entity, they were assigned the BIA-based rate given to the state-controlled entity; and (5) because Transcom’s Hong Kong suppliers did not establish that they had obtained products from independent Chinese producers, or that the Chinese producers from whom they obtained products did not know the products were destined for export to the United States, the BIA-based rate was applicable to the Hong Kong suppliers as well.
Commerce’s position has the effect of impоsing on Transcom’s suppliers the duty to provide information sufficient to establish their independence from the NME entity or run the risk of being subject to a BIA-based antidumping duty rate. Trans-com argues that imposing such a duty is contrary to section 1677e, which prohibits Commerce from imposing BIA-based rates on a company that had not refused to provide information or otherwise failed to cooperate in Commerce’s investigation.
That argument sidesteps the core principle underlying 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 assumption that the producers are рart 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 requires 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.
Accordingly, while section 1677e provides that Commerce may not assign a BIA-based rate to a particular party unless that party has failed to provide information to Commerce or otherwise faded .to cooperate, the statute says nothing about whether Commerce may presume that parties are entitled to independent treatment under section 1677e in the first instance.
There is a remaining question whether Commerce provided adequate notice to Transcom of its NME policy. To answer that question, we must look to the legal context in August 1994, when the notice of initiation for the seventh administrative review was published.
More than three years earlier, Commerce had announced its policy of treating exporters in NME countries as presumptively part of the NME entity.
See Iron Construction Castings,
56 Fed.Reg. at 2744;
Sparklers From the People’s Republic of China,
56 Fed.Reg. at 20,589. In setting forth its NME policy, Commerce made clear the consequences to an exporter of not rebutting the presumption of state control and establishing its independence: the exporter would be assigned the single rate given to the NME entity. Shortly thereafter, the Court of International Trade acknowledged and sustained
Furthermore, Transcom was on notice that Commerce had used BIA to set the NME rate.
Tianjin,
In the course of the administrative review, various of the specifically idеntified Chinese exporters failed to respond to Commerce’s investigation. Their failure to do so had two consequences; (1) it meant that they failed to establish their independence from (and therefore were properly treated as part of) the state-controlled NME entity; and (2) it meant that the statutory prerequisite for applying a BIA-based antidumping rate was met as to those producers, and thus, by extension, as to the state entity of which they were a part. It therefore follows that because the uncooperative producers were part of the NME entity and were subject to a BIA-based rate, and because Transcom’s suppliers did not establish their independence from the NME entity, Transcom’s imports were subject to a BIA-based assessment of antidumping duties.
Finally, Transcom argues that in any event it was improper to impose a BIA-based antidumping rate on Trans-com’s Hong Kong suppliers, since they were not Chinese firms and thus were not subject to the NME presumption. As the trial court explained, however, the “first to know” rule applied by Commerce to determine which, seller in a chain of distribution is subject to antidumping duties dictates that it is the first seller in the chain who knows or has reason to know that the products are destined for export to the United States on whom the antidumping duty is imposed. One consequence of Transcom’s failure to identify the Chinese producers that mаnufactured its imported products is that Transcom lost its opportunity to show that those producers did not know or have reason to know that the goods they were producing were destined for export to the United States. Commerce therefore properly assessed the an-tidumping duty by looking to those unidentified producers rather than to the Hong Kong resellers to whom they sold the exported tapered roller bearings.
In sum, we conclude that the consequence of our holding that Transcom’s Chinese producers were within the scope of the administrative review is that it was
AFFIRMED.