Shenzhen Xinboda Industrial Co., Ltd. v. United States

Slip Op. 17 - 160
UNITED STATES COURT OF INTERNATIONAL TRADE
:
SHENZHEN XINBODA INDUSTRIAL CO. LTD., :
QINGDA6O TIANTAIXING FOODS, CO., 	:
SHENZHEN BAINONG CO., LTD., SHENZHEN 	: 	Before:
YUTING FOODSTUFF CO., LTD., JINXIANG 	: 	R. Kenton Musgrave, Senior Judge
HEJIA CO., LTD., JINXIANG FEITENG 	: 	Consol. Court No. 16-00116
IMPORT & EXPORT CO., LTD., 	:
: 	PUBLIC VERSION
Plaintiffs, 	:
:
v. 	:
:
UNITED STATES, 	:
:
Defendant, 	:
:
and 	:
:
FRESH GARLIC PRODUCERS ASSOCIATION, 	:
et al., 	:
:
Defendant-Intervenors. :
:
OPINION
[Remanding 20th administrative review of fresh garlic from the People’s Republic of China on issue
of rejected economic comparability information and sustaining final results for one mandatory
respondent.]
Dated: December 5, 2017
Gregory S. Menegaz, J. Kevin Horgan, John J. Kenkel, Judith L, Holdsworth, and Alexandra
H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for the plaintiffs Shenzhen Xinboda
Industrial Co., Ltd., Shenzhen Bainong Co., Ltd., Shenzhen Yuting Foodstuff Co., Ltd., Jinxiang
Hejia Co., Ltd., and Jinxiang Feiteng Import & Export Co., Ltd.
Robert T. Hume, Hume & Associates LLC, of Taos, NM, for the plaintiff Qingdao
Tiantaixing Foods Co., Ltd.
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Emma E. Bond, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for the defendant. On the brief were Chad E. Readler,
Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr.,
Assistant Director. 	Of Counsel was Emily Beline, Attorney, Office of the Chief Counsel for
Enforcement and Compliance, U.S. Department of Commerce.
Michael J. Coursey, John M. Herrmann, and Joshua R. Morey, Kelley Drye & Warren, of
Washington, DC, for the defendant-intervenors.
Musgrave, Senior Judge: This opinion addresses three consolidated challenges to the
final antidumping (“AD”) duty administrative review1 Fresh Garlic from the People’s Republic of
China2 , 81 Fed. Reg. 39897 (June 20, 2016) (“20th AR Final Results”), PDoc 442, as explained by
the International Trade Administration, U.S. Department of Commerce (“Commerce”), in its issues
and decision memorandum (“IDM”) accompanying that public notice, PDoc 439. 	The period of
review (“POR”)3 is November 1, 2013, through October 31, 2014,and the pertinent plaintiffs here
are Shenzhen Xinboda Industrial Co., Ltd. (“Xinboda”) and Qingdao Tiantaixing Foods, Co.
(“QTF”). Together with the others,4 they challenge Commerce’s: (1) rejection of factual information
1 See Tariff Act of 1930 §751, as amended, 19 U.S.C. §1675. This is the 20th such review
(“AR 20”) of the AD duty order thereon. Cf. Fresh Garlic from the People’s Republic of China, 59
Fed. Reg. 59209 (Nov. 16, 1994).
2 Hereinafter “PRC”.
3 See Initiation of AD and Countervailing Duty Administrative Reviews, 79 Fed. Reg. 76956
(Dec. 23, 2014), PDoc 23.
4 Cf. Plaintiff Shenzhen Xinboda Industrial Co., Ltd.’s Motion for Judgment on the Agency
Record (“Xinboda Br.”) with Memorandum of Law in Support of Co-Plaintiffs Jinxiang Hejia Co.,
Ltd., Jinxiang Feiteng Import & Export Co., Ltd., Shenzhen Bainong Co., Ltd., and Shenzhen Yuting
Foodstuff Co., Ltd.’s Motion for Judgment upon the Agency Record at 9 (“[i]n order not to repeat
the arguments being made by the other Plaintiffs in their legal memoranda, co-Plaintiffs Hejia,
Feiteng, Bainong, and Yuting join in the arguments made by them and incorporate them herein”).
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from Xinboda as untimely; (2) selection of Romania as the surrogate country; (3) calculation of
Xinboda’s movement expenses; (4) application to QTF of facts otherwise available with an adverse
inference; and (5) disregard of QTF’s separate rate information as unreliable and finding that QTF
was part of the PRC-wide entity. For the following reasons, Xinboda persuades that the first issue
requires remand for reconsideration, obviating further discussion here of issues (2) and (3), but
QTC’s arguments on (4) and (5) lack persuasiveness.
I. Overview
Commerce initiated the 20th review of the AD order towards the end of December
2014 and initially selected Xinboda and Hebei Golden Bird Trading Co., Ltd. as mandatory
respondents for the POR. PDoc 138 at 4-5. The latter did not respond to its questionnaire; therefore
Commerce added or substituted QTF as a mandatory respondent. PDoc 165 at 1; PDoc 302 at 3.
In its preliminary results,5 Commerce found the magnitude of dumping for Xinboda’s entries to be
$2.72 per kilogram. See PDoc 398 at 1; PDoc 399 at 75973. For QTF, Commerce preliminarily
applied adverse facts available, found QTF ineligible for a separate rate, and included QTF in the
PRC-wide entity bearing the AD duty rate of $4.71 per kilogram.6 After considering the parties’
comments for the final results, Commerce affirmed that Xinboda had dumped subject merchandise
by a margin of $2.75 per kilogram, applied that rate to the separate-rate-eligible respondents, and
affirmed that QTF was ineligible for a separate rate. See PDoc 442 at 39898.
5 80 Fed. Reg. 75972 (Dec. 7, 2015), PDoc 399, and accompanying decision memorandum
(“PDM”), PDoc 398.
6 PDoc 398 at 11-14; PDoc 400.
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Xinboda and QTF filed timely challenges here to the 20th AR Final Results pursuant
to 19 U.S.C. §1516a(a)(2)(A)(i)(I) and (B)(iii) and claim proper jurisdiction under 28 U.S.C.
§1584(c). The standard of judicial review thereon is confined to substantial evidence on the record,
see 19 U.S.C. §1516a(b)(1)(B)(i), meaning “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion”, i.e., “more than a mere scintilla”. PAM, S.p.A. v. United
States, 582 F.3d 1336, 1339 (Fed. Cir. 2009) (citation omitted). This also means that the possibility
of drawing inconsistent conclusions from the record “does not prevent an administrative agency’s
finding from being supported by substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S.
607, 620 (1966) (citation omitted).
II. Xinboda’s Challenges
Xinboda moves for judgment on the administrative record of Commerce’s (1)
rejection of its supplemental submission of information pertaining to the Mexican economy as
potentially comparable to that of the PRC, (2) selection of Romania as the primary surrogate country,
and (3) calculation of movement expenses. Xinboda Br. at 2-35.
A. Rejection of Surrogate Country Information
1. Background
For outstanding AD orders, Commerce annually reviews and determines the margin
of dumping, i.e., the difference between export price or constructed export price and “normal” value
(“NV”). See 19 U.S.C. §1675(a)(1)(B). NV is to be determined to “a time reasonably corresponding
to the time of the sale used to determine the export price or constructed export price”. 19 U.S.C.
§1677b(a)(1)(A). When subject merchandise is from a non-market economy (“NME”), Commerce
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is required to base NV on the factors of production (“FOPs”) for subject merchandise and “utilize,
to the extent possible,” FOPs in one or more surrogate market economy countries that are
economically comparable to the level of economic development of the NME country and significant
producers of comparable merchandise. 19 U.S.C. §1677b(c). See, e.g., Jiaxing Bro. Fastener Co.
v. United States, 822 F.3d 1289, 1292 (Fed. Cir. 2016). In conjunction with such “to the extent
possible” utilization, and with one exception not relevant here, FOPs are to be valued on the basis
of the “best available information regarding the values of such factors”. 19 U.S.C. §1677b(c)(1)(B).
Towards that goal, Commerce tests FOP data on the record for (1) public availability, (2) product
specificity, (3) broad market average, (4) tax and duty exclusivity, and (5) contemporaneity. See
IDM at 12, citing Policy Bulletin 04.1; see, e.g., Fresh Garlic Producers Ass’n v. United States, 39
CIT ___, ___, 83 F. Supp. 3d 1330, 1337 (2015).
The administrative preference is to use FOPs from a single “primary” surrogate
country. See, e.g., Jiaxing Bro. Fastener, 822 F.3d at 1302, citing 19 C.F.R. § 351.408(c)(2). The
selection of thereof is a four-step process: First, Commerce requests from its Office of Policy (“OP”)
a list of countries at a comparable level of economic development to the NME country (the “OP
List”). See id. at 1293; see also NME Surrogate Country Selection Process, Policy Bulletin 04.1
(2004). The policy bulletin explains (at page 2; italics added) that “OP determines economic
comparability on the basis of per capita gross national income, as reported in the most current annual
issue of the World Development Report”. Second, Commerce identifies countries on that list with
producers of comparable merchandise. Jiaxing Bro. Fastener, 822 F.3d at 1302 (citations omitted).
Third, Commerce determines whether any of those countries are “significant producers” of
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comparable merchandise. Id. Fourth, if more than one country remains, Commerce will select the
country with the best data for FOP valuation. Id.; see also 19 U.S.C. § 1677b.
For the 20th AR, Commerce provided OP’s list to interested parties via a letter-
memorandum approximately four months after initiation. PDoc 153 (Apr. 20, 2015). Commerce
considers that list “non-exhaustive.” Id. (OP List at 1). The countries that made that list were based
on the available 2013 per capita gross national income (“GNI”) data from the World Bank,7 as
follows: PRC ($6,560); Romania ($9,060); Bulgaria ($7,360); South Africa ($7,190); Ecuador
($5,760); Thailand ($5,340); and Ukraine ($3,960). The letter-memorandum accompanying that list
also instructed:
Because it is the Department’s practice to determine economic comparability early
in a proceeding, we are providing interested parties an opportunity to comment on the
list as a starting point for surrogate country selection . . . and to propose for
consideration other countries that are at a level of economic development comparable
to the PRC. These comments are due by 5:00 pm Eastern Daylight Time (EDT),
April 27, 2015. Rebuttal comments are due by 5:00 pm EDT, May 4, 2015.
Id. at 1 (bolding omitted; italics added).
At the same time, the letter-memorandum stated it was Commerce’s “inten[tion] to
announce the identification of its surrogate country selection in its preliminary results”. Id. at 2.
Towards that goal, and as boilerplated in numerous other NME proceedings, in addition to the above
due dates the letter instructed four others: a June 1, 2015 deadline for commenting on surrogate
country selection with rebuttal by June 11, 2015; and a June 17, 2015 deadline for publically
7 In this instance, because the 2015 World Bank Development Report, published in December
2014, did not contain GNI data, OP relied on the December 16, 2014 revision to 2013 GNI data
published in the World Bank Development Indicators database. See PDoc 153 (OP List at 2).
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available information to value the factors of production for the preliminary results with rebuttal by
June 22, 2015. Id.
Xinboda responded with timely submitted comments on surrogate country selection
and FOP information that argued for India and/or Thailand as economically comparable to the PRC.
PDocs 156, 179. 	Xinboda did not at that time prospect Mexico as a country economically
comparable to the PRC, but on September 17, 2015, it submitted “additional” comments along with
2014 GNI data from the World Bank made available in July 2015, together with information on
Mexican garlic production, for the agency’s use when selecting the appropriate surrogate country
from the record. Xinboda contended that the information would establish Mexico as a significant
producer of garlic, and called Commerce’s attention to the fact that it had begun using such
information in other trade proceedings, and that its revised list in such proceedings included Mexico
and Thailand, which had not been considered as economically comparable countries at the time OP
prepared its list earlier in this review. See Xinboda Br. at 22 n.4, referencing PDoc 153 at 1.
Eight days later, Commerce rejected that submission as “untimely” and removed it
from the record. See PDoc 318, citing 19 C.F.R. §§ 351.302(d)(1)(i), 351.104(a)(2)(ii)). Cf. PDoc
312 (first page of rejected submission). Commerce stated that although the submission was filed
before the regulatory deadline for factual information to value FOPs, the submission contained GNI
data relating to economic comparability, and that the “previously established” deadline(s) for filing
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such information had already passed.8 See id. at 1. Xinboda asked Commerce to reconsider,9 but
Commerce stood by its rejection in the preliminary results -- issued two months later -- for the same
reasons as stated in its earlier letter to Xinboda. 	PDM at 16. See PDoc 325 at 1. For the final
results, Commerce adhered to that decision. IDM at 19-21.
2. Analysis
None of the papers indicates the precise regulatory deadline with which Xinboda’s
submission would have been in conflict, as the regulations 10 do not explicitly address “economic
comparability” related to the selection of the primary surrogate country. See generally 19 C.F.R §§
351.102(b)(21) & 351.301. However, it is at least clear that the GNI data of Xinboda’s supplemental
submission were factual in nature, regardless of the exact provision of those regulations that would
cover them, and at the very least the data would have been covered by the apparent “catch-all” of the
8 Commerce also rejected other Xinboda submissions containing information in support of
choosing Mexico as the primary surrogate country. See, e.g., PDoc 319 at 1; PDoc 320 at 1; PDoc
322 at 1; PDoc 323 at 1.
9 Xinboda Request to Reconsider (Sep. 30, 2015), PDoc 325. Xinboda here states that therein
it laid out the several reasons that constitute good cause to have accepted this information, including
Commerce’s emphasis on economic comparability, contemporaneity, and Xinboda’s inability to have
submitted this information at the initial deadline. Xinboda Reply at 8-9. The defendant disputes that
Xinboda argued good cause, but the record appears to support Xinboda’s characterization.
10 The relevant regulatory deadlines for the submission of factual information were amended
some four years ago, with an effective date of May 10, 2013. See Definition of Factual Information
and Time Limits for Submission of Factual Information, 78 Fed. Reg. 21246 (Apr. 10, 2013). At that
time, Commerce re-categorized the definitions of factual information and moved all administrative
time limits for such submissions to before the preliminary determination. See generally 19 C.F.R
§§ 351.102(b)(21) & 351.301. The stated purpose therefor was “so that [Commerce] may review
and analyze factual information at the appropriate stage in the proceeding, rather than be required
to review large amounts of information when it is too late to adequately conduct its analysis”. 78
Fed. Reg. at 21248. 	The amendment set forth five categories of factual information, currently
defined at 19 C.F.R. §351.102(b)(21), and deadlines for same.
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fifth regulatory category, which covers “factual information not directly responsive to or relating to”
the other four categories and bears a deadline of the earlier of 30 days prior to the scheduled date of
the preliminary results of an administrative review or 14 days before verification. See 19 C.F.R
§§351.301(c)(5). The record thus shows that the only deadline Commerce’s rejection adhered to in
this instance was the deadline specified in the OP List letter for submission of economic
comparability information, which is simply a “modification” of an administrative “procedural rule”.11
Administration thereof is reviewed for abuse of discretion. See Essar Steel Ltd. v. United States, 678
F.3d 1268, 1278 (Fed. Cir. 2012).
Xinboda broadly argues that Commerce’s rejection of its supplemental economic
comparability information was arbitrary, because the OP List letter deadlines have not been treated
as such (i.e.,“hard red-line deadlines”) in other proceedings. The defendant, supported by the Fresh
Garlic Producers Association (“FGPA”), contends such treatment in other proceedings does not
prevent Commerce from enforcing deadlines in this proceeding, and that “allowing parties constantly
to supplement the record with new information as it becomes ‘available’ would transform the
11 “It is always within the discretion of . . . an administrative agency to relax or modify its
procedural rules adopted for the orderly transaction of business before it when in a given case the
ends of justice require it.” American Farm Lines v. Black Ball Freight Service, 397 U.S. 532, 539
(1970) (internal quotes and citation omitted; italics added). Substantial prejudice is generally
required in order to obtain relief from such modification or relaxation. American Farm Lines, 397
U.S. at 539. See 5 U.S.C. §706 (“due account shall be taken of the rule of prejudicial error”); see,
e.g., PAM S.p.A. v. United States, 463 F.3d 1345 (Fed. Cir. 2006). “Absent constitutional constraints
or extremely compelling circumstances the administrative agencies should be free to fashion their
own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge
their multitudinous duties.” Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense
Council, Inc., 435 U.S. 519, 543-44 (1978)) (internal quotes and citations omitted; italics added).
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proceedings into Sisyphean endeavors, requiring Commerce to reconsider and to recalculate each
aspect of its decision ad infinitum.” Def’s Resp. at 31. See Def-Int’s Resp. at 31-38.
Paramount here is the principle that “an agency rule would be arbitrary and capricious
if the agency has . . . entirely failed to consider an important aspect of the problem”. Motor Vehicle
Mfrs. Ass’n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43 (1983)). See also, e.g., SKF
USA v. United States, 630 F.3d 1365, 1374 (Fed. Cir. 2011) (Commerce “has an ‘obligation’ to
address important factors raised by comments from petitioners and respondents”). An arbitrary
failure to consider “an important aspect of the problem” essentially gives rise to a presumption of
substantial prejudice, and “agency action is arbitrary when the agency offers insufficient reasons for
treating similar situations differently”. Dongbu Steel Co. v. United States, 635 F.3d 1363, 1371
(Fed. Cir. 2011). Similarly arbitrary and capricious is when an agency “consistently follow[s] a
contrary practice in similar circumstances and provide[s] no reasonable explanation for the change
in practice”. Consol. Bearings Co. v. United States, 348 F.3d 997, 1007 (Fed. Cir. 2003). “[O]nce
an agency agrees to allow exceptions to a rule, it must provide a rational explanation if it later
refuses to allow exceptions in cases that appear similar.” Green Country Mobilephone, Inc. v. FCC,
765 F.2d 235, 237 (D.C. Cir. 1985). Such arbitrariness is likewise presumptively prejudicial. Cf. id.
The matter at bar is similar to DuPont Teijin Films v. United States, 37 CIT ___, 931
F. Supp. 2d 1297 (2013), and Vinh Hoan Corp. v. United States, 39 CIT ___, 49 F. Supp. 3d 1285
(2015), which both concerned records that were compiled prior to amendment of Commerce’s
regulatory time limits for such submission to prior to the preliminary determination. 	The
supplemental GNI data of those cases were submitted well after the surrogate country comment
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deadline, yet Commerce did not reject those data as late, and both judicial decisions essentially
rejected the validity of declining to consider those data on the ground that they had been submitted
“too late in the proceedings to be considered by the OP when making its list of economically
comparable countries”. DuPont Teijin, 37 CIT at ___, 931 F. Supp. 2d at 1301. See id. at 1307; see
also Vinh Hoan 39 CIT at ___, 49 F. Supp. 3d at 1296-97. 	In this instance, Commerce simply
rejected Xinboda’s supplemental economic comparability information as untimely without
addressing Xinboda’s commentary on why it believed its submission was appropriate for the record,
thereby obviating further consideration thereof.
A wider context assists this analysis. Commerce’s stated policy and practice on the
selection of a surrogate country not on the OP List is only to resort to such a country when no
country on the list provides the scope of quality data that the administrative review requires. See,
e.g., Clearon Corp. v. United States, 38 CIT ___, Slip Op. 14-88 (2014) at 21. Adhering to that
practice in this instance, the PDM’s discussion on the matter thereby avoided any further discussion
of Xinboda’s argument, in its request for reconsideration, that rejection of its submission solely on
the ground of timeliness was inconsistent with how Commerce had treated similar such submissions
previously, see infra, videre licet:
Xinboda argued that [Commerce] should consider using India or Mexico as the
primary surrogate country. 	However, . . . the Department only departs from the
countries on the OP list if we find that none of the countries on the list are significant
producers of identical or comparable merchandise or there are issues regarding the
availability of SVs from the countries on the list. . . . [W]e have determined that at
least two countries identified on the [OP] List are significant producers of identical
or comparable merchandise and that Romania provides sufficient reliable sources of
data from which to derive SVs. Therefore, we have not considered using India or
Mexico as the primary surrogate country and have not considered the potential SV
information from those two countries.
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PDM at 24-25.
In other words, because Commerce ultimately identified two countries on the OP List
that satisfied the statutory requirements, that circumstance precluded argument in favor of any other
country not on that list -- quod erat demonstrandum: so long as there is at least one country on that
list that satisfies the requirements of comparable merchandise, significant production and quality
data, Commerce will not budge from the OP List, i.e, regardless of whether, at the time Commerce
actually (and merely preliminarily) selects the surrogate country and announces that selection in the
preliminary results, the World Development Report Indicators data that may in fact exist and would
be relevant to a particular POR may differ from those relied upon when the OP List was compiled,
i.e, regardless of the fact that the regulatory deadlines, as amended, for the submission of “factual
information”12 do not contemplate separate deadlines for the “economic comparability” of countries
encompassed by 19 U.S.C. §1677b(c)(2)(B), and, i.e., regardless of the fact that Xinboda’s
supplemental submission was otherwise in compliance with the administrative regulations for
submission of factual information but was rejected as “untimely” solely because, in this instance,
Commerce decided upon strict adherence to the deadlines for economic comparability announced
in its OP List letter. Thereby, Commerce rendered the OP List a “final” determination, de facto, on
“economic comparability,” and any comments on that list (or rebuttal thereof) a nullity.
On the one hand, it is not inherently unjust, at least in the abstract, to subject the
processing of all administrative reviews to uniform and unexceptional adherence to deadlines for the
purpose of gathering information, especially where “perfect” information (in the sense of completed
12 See 19 C.F.R. §§ 351.301 (time limits for submission) & 351.102(b)(21) (definition of
“factual information”)
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and extant) is concerned, such as that pertaining to sales and costs that have already occurred during
the POR under review. On the other hand, information that comes into “being” during a POR, e.g.,
with respect to updates to country economic comparability or FOPs from publically available
sources, is a harder call, due to the tension between administrative burdens and the interest in justice
(i.e., accuracy) that the law demands. 	Perhaps for that reason, Commerce has been somewhat
inconsistent in requiring strict adherence to the deadlines of its OP List letter. See infra. At any rate,
the fact that the fact-gathering stage of some administrative reviews of NME subject merchandise
can straddle the timing of updates to relevant and publically available GNI data, among, e.g., the
World Development Report Indicators occurring after Commerce’s OP determines a list of
economically comparable countries pertinent to a particular review, has been problematic, as this and
other cases show. Cf. Policy Bulletin 04.1 (“OP determines economic comparability on the basis
of per capita gross national income, as reported in the most current annual issue of the World
Development Report”) (first italics added).
Commerce’s OP List letter states that “it is [Commerce]’s practice to determine
economic comparability early in a proceeding”. PDoc 153 at 1.13 But OP’s determination of its list
of economically comparable countries is not “the” determination of economic comparability that
Commerce is obliged to make. The OP List, as Commerce itself states, is only a “starting point”.
PDoc 153 at 1. The list itself is always stated to be non-exhaustive, therefore non-exclusive. Cf. 19
13 Italics added. Cf. also, e.g., First Administrative Review of Sodium Hexametaphosphate
From the PRC: Final Results of the AD Duty Administrative Review, 75 Fed. Reg. 64695 (Oct. 20,
2010) and accompanying issues and decision memorandum at cmt 3 (“[Commerce] relied on the
most recent GNI per capita data available for this proceeding at the time that economic
comparability was determined for this case”) (italics added).
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C.F.R. §351.408(b) (“[i]n determining whether a country is at a level of economic development
comparable to the nonmarket economy under section 773(c)(2)(B) or section 773(c)(4)(A) of the Act,
the Secretary will place primary emphasis on per capita GDP[ 14 ] as the measure of economic
comparability”) (first italics added). In other words, the OP’s list is not determinative of the issue
of economic comparability that Commerce must decide.
Further, as the court has previously observed, “[w]hen the OP issues its list ‘early in
a proceeding,’ months before the preliminary results, issues of finality are not yet present”. DuPont
Teijin, 37 CIT at ___, 931 F. Supp. 2d at 1306. 	Apart from the OP List, nothing in the record
indicates Commerce “determined” economic comparability “early in the proceeding” within the
meaning of the statue or regulation, or otherwise communicated such a determination to the parties
prior to the preliminary results; indeed, Commerce does not “make” a surrogate country selection
until it is announced in the preliminary results, as explicitly stated in the OP List letter-
memorandum: “[Commerce] intends to announce the identification of its surrogate country selection
in its preliminary results.” PDoc 153 at 2. Even after announcement of a surrogate country in the
preliminary results, Commerce can, and does, change its selection in the final results, because
Commerce’s surrogate country decision is further based on the availability and quality of surrogate
value data available in each potential surrogate country, which information is submitted up to 20
days prior to the preliminary results (i.e., 30 days prior with a 10 day rebuttal deadline).
14 Commerce’s current reliance upon GNI here and in other proceedings as the better
measure of economic comparability is undisputed. See generally Tianjin Wanhua Co. v. United
States, 41 CIT ___, ___, 253 F. Supp. 3d 1318, 1321-22 (2017).
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Although “the law does not require [Commerce] to choose the most comparable
economy, but rather a comparable economy”, Tehnoimportexport v. United States, 15 CIT 250, 256,
766 F. Supp. 1169, 1175 (1991) (italics in original), the reality here, apart from abstraction (cf.
supra), is that Commerce has not regarded the deadlines announced in its OP List letter
memorandum as “hard red-line deadlines” in a number of prior instances, as Xinboda argued to
Commerce (and here reiterates), its central point being that even after the regulatory deadlines were
amended, Commerce maintained “a general practice of allowing parties to submit GNI information
in later surrogate value submission well after the surrogate country comment period has passed”.15
Cf., e.g., DuPont Teijin, supra with Court No. 12-00088, Attachment 3 to Plaintiff DuPont Teijin
56.2 Br., ECF No. 25 (Sep. 7, 2012) (letter-memorandum to parties with OP’s list together with
deadlines for comments and factual information submissions).
15 Xinboda Br. at 6, referencing Surrogate Value Submission (Aug. 31, 2015) in case no.
A-570-912 at Attachment 6 (GNI data from World Development Report Indicators) IA ACCESS
doc# 3301202-01; Surrogate Value Submission (July 16, 2015) in case no. A-570-900 at Exhibit 13
(GNI data from World Development Report Indicators) IA ACCESS doc# 3291511-02; Surrogate
Value Submission (Mar. 31, 2015) in case no. A-570-904 at Exhibit 12 (GNI data from World
Development Report Indicators) IA ACCESS doc# 3267659-03; Surrogate Value Submission (Nov.
4, 2014) in case no. A-570-900 at Exhibit 10 (GNI data from World Development Report Indicators)
IA ACCESS doc# 3239651-02; Surrogate Value Submission (Oct. 31, 2014) in case no. A-570-932
at Exhibit 2 (GNI data from World Development Report Indicators) IA 	ACCESS 	doc#
3239156-01.”). Xinboda also points to Hardwood and Decorative Plywood Final Determination
of Sales at Less Than Fair Value, 78 Fed. Reg. 58273 (Sep. 23, 2013) and accompanying I&D Memo
at cmt. 7 and Folding Metal Tables and Chairs From the People’s Republic of China: Final Results
of 2007-2008 Deferred AD Duty Administrative Review and Final Results of 2008-2009 AD Duty
Administrative Review, 76 Fed. Reg. 2883 (Jan. 18, 2011) and accompanying I&D Memo at cmt. 4
as examples where Commerce has accepted “critically new” surrogate country data after the
preliminary determination. 	Id. at 6-7. 	Cf. Diamond Sawblades Manufacturers Coal. v. United
States, 2017 WL 3381909 at *8 (Fed. Cir. 2017) (“Commerce’s willingness to consider comments
related 	to 	another 	methodology 	in 	the 	case 	briefs 	filed 	by 	the 	parties 	in 	Purified
Carboxymethylcellulose From Finland while refusing to do so here indicates that Commerce’s
decision in this case is not in accordance either with its own practices or with law”).
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“An action . . . becomes an ‘agency practice’ when a uniform and established
procedure exists that would lead a party, in the absence of notification of change, reasonably to
expect adherence to the established practice or procedure.” 	Ranchers-Cattlemen Action Legal
Found. v. United States, 23 CIT 861, 884-85 (1999), referencing Heraeus-Amersil, Inc. v. United
States, 9 CIT 412, 416, 617 F. Supp. 89, 93 (1985). To the extent that rule touches upon some sort
of reliance interest, the better course would have been for an interested party to alert Commerce in
the initial comments on economic comparability of an intention to submit supplemental information
if and as it became available. Cf. Extension of Time Limits, 78 Fed. Reg. 57790 (Sep. 20, 2013) with,
e,g,, Surrogate Value Submission (Mar. 30, 2015) in case no. A-570-912, IA ACCESS doc#
3267470-01 (“[w]e will continue to review additional information regarding surrogate values and
may submit additional surrogate value or rebuttal surrogate value information on or before the
deadline enumerated in [Commerce]’s regulations, i.e., thirty days before the scheduled date of the
preliminary determination”). And it is also notable that Commerce treated the petitioners in the
same manner as Xinboda during the 20th AR. See PDM at 17 (rejecting petitioners’ June 29, 2915
rebuttal comments because they contained untimely surrogate country information). To that extent,
at least, Commerce’s treatment of such submissions during the proceeding was consistent.
Nonetheless, the instances to which Xinboda points implicitly underscore that
Commerce’s “relaxation” of its modified deadline in the OP List letter has (or had) been in
accordance with its statutory mandate, which does require reasonable inquiry (cf. Vermont Yankee
Nuclear Power, supra) into what is the best available information for, e.g., comparability. 	See
supra. And the purpose of regulation, of course, is always in service to the purpose of its enabling
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legislation. 16 In this instance, of trade law administration, the statute and regulatory deadlines are
intrinsically bound to the selection of that surrogate country that will,“to the extent possible”, permit
the “best available information” to value FOPs, a decision that is also intrinsically bound to
economic comparability and surrogate selection therefrom. See 19 U.S.C. §1677b(c)(1)(B); see
also Vinh Hoan, 39 CIT at ___, 49 F. Supp. 3d at 1298 (“[i]t is undoubtedly true that the selection
of the primary surrogate country is central to [Commerce]’s selection of sources to value a
respondent’s factors of production”).17
And yet, “best available information” is not defined by statute. Thus, it has been held
to confer administrative discretion over what that constitutes. Jiaxing Bro. Fastener, 822 F.3d at
1293, citing 19 U.S.C. §1677b(c)(1). 	But at the same time, numerous decisions have also
emphasized that it is the interested parties who bear the burden of building an adequate record to
support their case. E.g., QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011).
That being the requirement, and contrary to the defendant’s contention above, the statutory term
“available” (implying not only “on” but “for” the record18 ) cannot be interpreted in a manner that
would unreasonably impede a party from meeting its record-building obligation and preclude from
the record relevant factual information that otherwise comports with the regulatory deadlines for the
submission thereof, and would further the statute’s objectives, via, e.g., sudden insistence upon
16 See, e.g., Mourning v. Family Publications Serv., Inc., 411 U.S. 356, 369 (1973).
17 Cf. PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 751, 761 (Fed. Cir. 2012)
(“[u]nder 19 C.F.R. § 351.301(b)(2), Avisma had until September 17, 2007, to submit factual
information to [Commerce] to be used in the Final Results”).
18 Cf., e.g., 19 C.F.R. §351.102(21)(iv) (data placed on the record by Commerce).
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adherence to the “modified” regulatory deadline of the OP List letter for a specific type of factual
information that, volte face, conflicts with the manner in which such modification has been
administered in other prior proceedings -- particularly when, contrary to the expressed intention in
the OP List letter to “determine” economic comparability “early in the proceeding,” the agency has
not even fully considered, let alone “determined,” that issue.
Commerce is obviously aware of the statutory mandates to determine FOPs that are
“to the extent possible” “in”19 a country economically comparable to the level of economic
development of the NME country which has significant producers of comparable merchandise, and
(again with one exception not relevant here) on the basis of the “best available information regarding
the values of such factors” et cetera. 20 When the reality is that economic comparability has yet to
be determined during the proceeding, and a party has previously complied with the original
“deadline” for commenting thereon and for submitting FOP information therefor, a subsequent
(attempt of) submission of relevant factual information that is otherwise within the regulatory
deadline governing such factual information constitutes “available” information within the meaning
and spirit of the statute. Cf. DuPont Teijin, 37 CIT at ___, 931 F. Supp. 2d at 1306 (“[Commerce]’s
19 Sic. See 19 U.S.C. §1677b(c)(1)(B) & (4).
20 Id. 	Furthermore, although resort to determining NV on the basis of FOPs in an NME
situation occurs when “the administering authority finds that available information does not permit
the [NV] of the subject merchandise to be determined under subsection (a),” 19 U.S.C.
§1677b(c)(1)(B), the general requirement of that subsection to determine NV “at a time reasonably
corresponding to the time of the sale used to determine the export price or constructed export price
under section 1677a(a) or (b) of this title” cannot be overlooked in the determination of relevant
FOPs when an NME situation requires resort to subsection (c).
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interest in the finality of the OP’s list and the administrative burden of considering subsequently
released GNI data does not outweigh [Commerce]’s statutory obligations”).
Commerce acknowledged Xinboda’s September 17, 2015, submission as within the
regulatory deadline for submission of information to value FOPs, i.e., 30 days prior to the
preliminary results in order to permit submission of rebuttal thereof and consideration, while
avoiding acknowledgment of the fact that Xinboda’s supplemental economic comparability
information was likewise “within the regulatory deadline”. 	Cf. PDoc 318 at 1 with 19 C.F.R.
§351.301(c)(3). 	Despite judicial request in prior cases for greater explanation on the subject,
Commerce did not avail itself of the opportunity to explain adequately why it “singled out” the
attempt(s) to provide updated GNI information for “special treatment” in this instance.
Even the language in the OP List letter does not make clear that information
submitted after the letter’s stated deadline must be rejected and ignored; it merely implies that
Commerce may not have time to consider such information prior to the preliminary results. Cf., e.g.,
PDoc 153 at 1 (providing “opportunity to comment on the list as a starting point for surrogate country
selection . . . and to propose for consideration other countries that are at a level of economic
development comparable to the PRC” but providing deadlines for “[t]hese comments” only). And
yet Commerce clearly considered information submitted at the 30-day deadline as well as rebuttal
information 10 days later as well as pre-preliminary results comments filed less than 30 days before
the preliminary results. See PDM. But at the same time, the relative complexity of considering all
the minutiae associated with the particular FOPs involved in the production of garlic, let alone other
subject merchandise products, simply cannot compare to the relatively straightforward consideration
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of country-versus-country “economic comparability” based on a listing of GNI information. Hence,
imposing the “hard red-line deadlines” of the OP List letter in this instance (in response to which
Xinboda did submit timely comments and information, as aforesaid), when juxtaposed against the
other instances of record when Commerce has “relaxed” those deadlines in the past (which amounts
to re-modifying the “modified” deadlines of the OP List in any event) to “allow” submission of
updated GNI information, can hardly be said to be “modify[ing] its procedural rules adopted for the
orderly transaction of business before it when in a given case the ends of justice require it”,
American Farm Lines, supra, 397 U.S. at 539 (italics added), i.e, the statutory mandate of
determining margins as accurately as possible, see., e.g., Nan Ya Plastics Corp. v. United States, 810
F.3d 1333, 1343 (Fed. Cir. 2016) (“clarify[ing] that ‘commercial reality’ and ‘accurate’ represent
reliable guideposts for Commerce’s determinations’), or to amount to a rational “pursu[it of a]
method[ ] of inquiry capable of permitting [Commerce’s analysts] to discharge their multitudinous
duties”, Vermont Yankee Nuclear Power, 435 U.S. at 543 (italics added). Once again: preliminary
results are just that, preliminary -- Commerce has until the final results to make its decision.
Towards that end, therefore, it is also rather oblique if not disingenuous for Commerce to claim it
cannot consider surrogate country comments after the OP List letter deadline when that deadline is
itself still “early in the proceeding”.
The foregoing does not resolve to a coherent rational whole, nor can the court
overlook the fact that Commerce’s rather “terse” explanation for rejecting Xinboda’s supplemental
submission ignores the entirety of DuPont Teijin’s numerous holdings on the administrative burdens
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vis-à-vis the AD duty statute and finality.21 The defendant cites to Essar Steel, PSC, and Dongtai
Peak Honey as support for its position, emphasizing that Commerce is “not required to demonstrate
good cause for rejecting [a respondent’s] untimely submissions” 22 , however those cases are
distinguishable from the facts at bar.
In Essar Steel, a party requested that Commerce reopen the record on appeal and
admit new documents. 678 F.3d at 1276-77. The court was rightly concerned not only with the fact
that the party had the burden to create an accurate record during the investigation (the party had the
correct documentation it wished to submit on appeal during the investigation but chose not to submit
it) and with the interests of efficiency and finality. In the case at bar, by contrast, Xinboda was
requesting Commerce to consider information properly submitted under the regulation of the exact
21 E.g.: “[Commerce]’s reliance on the administrative burdens of reconsidering the OP’s
list do not excuse it from complying with its statutory obligations to determine accurate dumping
margins, including its statutory obligation to use data from an economically comparable country”;
and Commerce’s “position . . . conflicts with its established practice of permitting parties to submit
factual information to ‘rebut, clarify, or correct’ information placed on the record by [Commerce]”;
and “[w]hen the OP issues its list ‘early in a proceeding,’ months before the preliminary results,
issues of finality are not yet present”; and “[Commerce]’s interest in the finality of the OP’s list and
the administrative burden of considering subsequently released GNI data does not outweigh
[Commerce]’s statutory obligations here and does not permit [Commerce] to completely eliminate
any meaningful opportunity to submit factual information related to economic comparability”; and
“time constraints do not automatically trump Commerce’s statutory obligation to determine accurate
dumping margins with surrogate data from an economically comparable country”; and Commerce
(here as well) “has not provided a reasoned justification for singling out the OP list as factual
information placed on the record by Commerce that the parties cannot rebut, clarify, or correct.”
DuPont Teijin, 37 CIT at ___, 931 F. Supp. 2d at 1306. See also Vinh Hoan, 49 F. Supp. 3d at 1301
(discussing the “data covering 7 out of 12 months of the POR . . . may affect its choice of a primary
surrogate country.”).
22 Def’s Resp. at 34, quoting Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d
1356, 1352 (Fed. Cir.2015). See also Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir.
2012); PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 751 (Fed. Cir. 2012).
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type of information Commerce was considering for the preliminary results due three months later.
And unlike in Essar Steel, the information was not “withheld” by Xinboda, the information Xinboda
sought to submit was not yet published by the World Bank at the time of OP compiled its list.
Moreover, reopening a record after a decision has been made and a degree of finality attaches is
entirely different from the circumstances at bar, where Commerce did not have an interest in finality
or efficiency at the point where it rejected Xinboda’s supplemental factual submission, because
economic comparability was still an open question at that point. Thus the defendant’s suggestion that
Xinboda’s reasoning would require “Commerce to consider reopening and supplementation and to
recalculate each aspect of its decision ad infinitum”, Def’s Resp. at 31, is inaccurate. Rather than
transforming the proceeding into “Sisyphean endeavors”, Xinboda was apparently and simply
requesting that Commerce do precisely what it was already in the process of doing, i.e, determining
the primary surrogate country, but with, Xinboda here claims, more and more accurate information.
In PSC, a party attempted to submit an affidavit with its administrative case brief.
The court held that Commerce has discretion to “set and enforce deadlines”, of course, and that a
court “cannot set aside application of a proper administrative procedure because it believes that
properly excluded evidence would yield a more accurate result if the evidence were considered.”
688 F.3d at 760-61. 	But it was also clear from the facts of that case that the affidavit that the
plaintiff attempted to submit contained brand new information, not allowed in a case brief, which
was submitted well after the preliminary results and well after the regulatory deadline to submit new
information. Id. at 757. PSC is also unlike the circumstances at bar.
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Dongtai Peak Honey broadly holds that accuracy concerns cannot overcome
Commerce’s ability to enforce its procedural deadlines for submission of questionnaire responses
and for requests for extension thereof. Under the facts of that case, Commerce had earlier warned
the plaintiff-respondent, in granting its eleventh-hour request for an extension of time, of the need
to “plan accordingly” in future, 777 F.3d at 1347, and the respondent was, subsequently and clearly,
untimely in attempting -- twice -- to request another extension of time to respond to a supplemental
questionnaire. In denying those requests, Commerce also noted its earlier caution to the respondent
about timeliness. Id. Dongtai Peak Honey is also unlike the circumstances at bar.
In contrast to those cases (and as mentioned previously), Xinboda did provide timely
comments on economic comparability and FOP information in the first instance, and its submission
of factual information was well within the regulatory deadline for submission thereof (i.e., 30 days
prior to the preliminary results, November 2, 2015). The deadline of June 11, 2015, in the OP List
letter to submit any information related to surrogate country selection is itself not a regulatory
deadline but a modification of one, and Commerce’s “adherence” to the deadlines of that letter in
other and in this very proceeding does not appear to have been a model of consistency. For example,
while Commerce also states in its OP List letter that in order for surrogate value information to be
considered in the preliminary results, it must be submitted by June 17, 2015, yet in this case (and,
Xinboda argues, in every case even with the same language in the letter), Commerce considered
surrogate value information submitted after this point up through and including the submission that
parties submit at the very last day (30 days and 20 days prior to the preliminary results) -- which is
consistent with its regulation: 	Commerce references submissions from November 2 in its
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preliminary results and even relies on a financial statement submitted on November 2 -- well after
the initial OP List letter “deadline” of June 17, 2015 for submission of that information. Prelim. SV
Memo at 14, PDoc 401. See also supra.
Granted, the OP List letter makes explicit reference to the deadlines of the regulation
for the purpose of submitting FOP information (thereby undercutting its own “deadline” in the OP
List letter) and does not do so with respect to economic comparability, but the bottom line here is
that Commerce was not “denied” the reasonable amount of time contemplated by the purpose of the
timing regulation (as amended to 19 C.F.R. §351.301) to consider the surrogate country information
submitted on September 17, 2015 ahead of its preliminary results, which were due November 30,
2015, or, for that matter, for its final results due June 20, 2016. The regulation does not contemplate
a separate deadline for surrogate country information. 	See Xinboda Br. at 2-7 (discussing the
regulation). In view of the foregoing, the matter requires remand for reconsideration of the decision
to reject Xinboda’s supplemental September 17, 2015 submission as untimely.23
B. Xinboda’s Remaining Challenges
Xinboda separately challenges Commerce’s selection of Romania as the primary
surrogate country from which to select the FOPs and Commerce’s calculation of inland
transportation and brokerage and handling expenses. 	See IDM at 4-16, 30. 	On the first issue
23 Once again: “[i]f administrative constraints prevent Commerce from considering economic
comparability after a certain point in the administrative process, that is, prior 	to the existing
regulatory deadline for the submission of factual information, Commerce may create a reasonable
deadline for the submission of GNI data pursuant to the requirements of the APA.” 	DuPont
Teijin, 37 CIT at ___, 931 F. Supp. 2d at 1307. The court has also considered the parties’ other
arguments on this issue but concludes that further discussion of them would not materially advance
this decision
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Xinboda argues that the Romanian garlic market is distorted by import tariffs and that Commerce
should have selected Mexico, or, in the alternative, India or Thailand. Xinboda Br. at 15-36. On the
second issue Xinboda argues that Commerce erred in using a 10,000 kg denominator from the World
Bank’s report entitled “Doing Business 2015 Romania”. Id. at 33. These issues are not part of the
“case or controversy” at this point. Cf. section A, supra, with, e.g., Tregea v. Bd. of Directors of
Modesto Irrigation Dist., 164 U.S. 179 (1896).
III. QTC’s Challenges
QTF’s separate motion for judgment challenges Commerce’s determination that QTC
did not cooperate to the best of its ability and the resulting determination to apply total adverse facts
available (total AFA) as well as Commerce’s rejection of its separate rate information, conclusion
that it is part of the PRC-wide entity, and assignment to it of the PRC-wide rate of $4.71/kg. It
contends that the dispute here relates to the extent to which Commerce may appropriately rely on
PRC government regulations relating to PRC’s phytosanitary inspection program to conclude a
respondent fails to cooperate to the best of its ability and whether it is appropriate to conclude that
respondent is part of the PRC-wide entity.
A. Background
QTF first shipped subject garlic to the United States during the November 1, 2006,
through April 30, 2007 period and participated in a new shipper review that determined QTF to have
been free of state control and entitled to the separate rate of 32.78 percent, significantly lower than
the PRC-wide rate of 376.67 percent. See generally Kwo Lee, Inc. v. United States, 39 CIT ___, 70
F. Supp. 3d 1369 (2015) (“Kwo Lee”); Fresh Garlic from the PRC, 73 Fed. Reg. 56550 (Sep. 29,
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1008) (inter alia, 12th new shipper reviews). The 32.78 percent rate applied only when QTF was
both the exporter and the producer of the subject garlic. Id.
Until the POR at bar, QTF had been dormant in exporting garlic into the United
States. During the POR, it began to ship large quantities of garlic into the United States, see, e.g.,
Kwo Lee, 39 CIT at ___, 70 F. Supp. 3d at 1372, purportedly due to the fact that cash deposit rates
for all other companies except one had increased to a point where QTF’s cash deposit rate became
competitive, QTF Br. at 5. The importer of record claimed that the garlic entries were eligible for
QTF’s AD duty rate, but U.S. Customs and Border Protection (Customs) was unable to determine
that QTF was, in fact, the producer. 	Id. 	Customs thus required the importer of record to post
additional security equal to the PRC-wide AD duty rate. Id. The importer sought judicial review
thereof and the higher security was preliminarily enjoined in that process, but the higher security was
ultimately sustained because “Customs reasonably determined that it could not verify that QTF was
the producer” of the subject garlic. Kwo Lee, 39 CIT at ___, ___, 70 F. Supp. 3d at 1373, 1376-77.
The garlic entries considered in Kwo Lee were encompassed by 20th AR’s initiation
on December 23, 2015. PDoc 23. See Kwo Lee, 39 CIT at ___, 70 F. Supp. 3d at 1372. QTD draws
attention to the fact that after the Kwo Lee case, it voluntarily participated in this 20th AR before
becoming a mandatory respondent and was “pre-warned” of the importance of the link between the
PRC Inspection and Quarantine (“CIQ”) phytosanitary certificates and the “producer”. See QTF
Reply at 5, referencing IDM at 2. QTF’s May 5, 2015 Section A questionnaire response certified
that it produced all of its subject garlic in the QTF facility located in Qingdao City. PDoc 163 at
A-13; see also CDoc 82 at Exh. A-12; PDoc 175 at D-3-D-4. QTF further stated that it had “no
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relationship with any other producer or exporter” of garlic from the PRC, and that it “does not
coordinate with other exporters in setting prices or in determining which companies will sell to
which markets.” PDoc 163 at A-3, A-5, A-8. 	In its Section D questionnaire response, QTF also
certified that it produced all the merchandise under consideration in its manufacturing facility in
Qingdao City. PDoc 175 at D-3-D-4. QTF also submitted CIQ certificates as part of its garlic export
documentation. CDoc 91-95 at Exh. 18. QTF also stated that all of its purchasing, processing, and
selling activities took place “at the QTF facility, where the processing workshops, warehouses, sales
and administrative office are located.” PDoc 163 at A-13.
In response to QTF’s submissions, the petitioner FGPA submitted information
regarding the legal, regulatory, and administrative framework of the Chinese inspection and
quarantine regime that produces the CIQ certificates. See PDoc 182 at Att. 1. As described by
FGPA, the applicable law and regulations required exported foods to be inspected at the CIQ
inspection bureau with jurisdiction over the geographic area where the manufacturer was located.
Id., Att. 1, at 4-5, 7. Those authorities also required each manufacturer to register with the relevant
PRC authority and to receive a unique CIQ code. Id., Att. 1 at 4-6. The CIQ certificates issued after
the inspection contain the manufacturer-specific CIQ code and the location of inspection. Id., Att.
1 at 6-9; see also CDocs 91-95 at Ex. 18.
Commerce then issued a supplemental questionnaire asking QTF to explain
discrepancies in its CIQ certificates. PDoc 303; CDoc 136. Among other discrepancies, Commerce
asked QTF to explain why some CIQ certificates reflected companies other than QTF as the
producer. CDoc 136 at 3 (listing the other producers as “[[
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]]”). Commerce
also asked QTF to explain why many CIQ certificates showed inspection locations other than
Qingdao City, the location where QTF certified that all of its garlic was processed. CDoc 136 at 3.
The questionnaire also asked QTF to explain why its CIQ certificates showed that more than [[
]] kilograms of garlic were inspected in [[ 	]], more than [[ 	]] kilograms
of garlic were inspected in [[ 	]], and only less than [[ 	]] kilograms of garlic
were inspected in Qingdao City. CDoc 136 at 3.
In its response on September 17, 2015, QTF stated that it was the processor of all
garlic, but had purchased some raw garlic from one of the producers listed in Commerce’s
questionnaire, [[ 	]]. CDoc 146 at 2-3. QTF further stated it had no business relationship
with the other producer listed in Commerce’s supplemental questionnaire, [[ 	]], speculating
that “[[ 	]] may have been used by an agent to perform the [[ 	]].” Id.
at 3. 	With respect to the processing locations, QTF stated that the CIQ certificates from other
locations, including [[ 	]], “were actually processed and packed by QTF at
its facility in Qingdao.” Id. at 3; see also CDoc 148 Exh. 7 (providing “sample” production records).
And although QTF clarified that the CIQ certificates showed less than [[ 	]] kilograms of
garlic produced in [[ 	]], it conceded that the CIQ certificates showed that more than [[
]] kilograms of garlic were inspected in locations other than Qingdao City. CDoc 146 at 5.
FGPA responded on October 5, 2015, reiterating that PRC law requires food exports
to be inspected at the CIQ bureau in the location where the food was manufactured. PDoc 327 at
2. Because the CIQ certificates reflect the manufacturing location rather than the origin of raw
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inputs, FGPA explained that QTF’s purchases of raw inputs from another company would not
explain the discrepancies in the CIQ certificates. 	Id. at 18-19. 	And because many of the CIQ
certificates showed manufacturing locations other than Qingdao City, FGPA argued that QTF’s
garlic was produced by other companies. 	Id. at 2. 	FGPA further argued that many of the CIQ
certificates “either lack information” regarding the manufacturer code and the location of the
inspection bureau, “or have a CIQ code belonging to a different entity.” PDoc 327 at 13.
QTF responded on October 14, 2015 and continued to argue that it was, in fact, the
producer of all garlic entries. PDoc 338 at 3 (citing CDoc 152 at Exh. 11); see also, e.g., CDoc 159
at A-2-A-3.
In the preliminary results, Commerce found that “QTF was not the sole producer of
the garlic it reported in its sales database and that necessary information [was] not on the record.”
PDM at 13; see also CDoc 167 (AFA memorandum). Without “complete information” regarding
the producers of the subject merchandise, Commerce explained that it could not determine that
QTF’s reported factors-of-production information was accurate or complete. 	PDM at 13.
Commerce preliminarily concluded “that QTF’s various explanations” for the discrepancies in its
CIQ certificates were “not credible” and that other entities “produced the bulk” of the garlic that
QTF reported to Commerce. 	Id. at 14. 	Accordingly, Commerce preliminarily relied on facts
available pursuant to 19 U.S.C. §1677e(a), finding that QTF “withheld requested information, failed
to provide requested information by the established deadlines and significantly impeded the
proceeding.” 	Id. at 13. 	In light of QTF’s failure to provide complete information regarding its
processors and factors of production, moreover, Commerce found that QTF failed to cooperate to
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the best of its ability and preliminarily applied total adverse facts available (AFA). Id. at 13; see also
19 U.S.C. §1677e(b).
In the final decision, Commerce determined (1) to apply adverse facts available with
an adverse inference to QTF, and (2) to treat QTF as part of the PRC-wide entity subject to the
PRC-wide rate of $4.71 per kilogram. IDM at 3-6, 23. QTF disputes each of these findings. QTF
Br. at 11-19.
B. Application of AFA
Commerce must follow a two-step process to apply facts available with an adverse
inference (“AFA”). 19 U.S.C. §1677e. First, Commerce must use facts otherwise available to fill
gaps in the record either (1) if necessary information is not available on the record, or (2) if an
interested party withholds information requested by Commerce, fails to provide the information by
the applicable deadlines or in the form and manner requested, significantly impedes the proceeding,
or provides information that cannot be verified. Id. §1677e(a). This has been interpreted to mean
Commerce uses facts available when “it has received less than the full and complete facts needed
to make a determination because a party has failed to provide requested information within the
deadline for submission.” Fresh Garlic Producers Assoc. v. United States, 39 CIT ___, ___, 121
F. Supp. 3d 1313, 1324 ( 2015), citing Nippon Steel Corp. v. United States, 337 F.3d 1373, 1381
(Fed. Cir. 2003) (“Nippon Steel”).
Second, if an interested party fails to cooperate to the best of its ability, Commerce
“may” apply an adverse inference in selecting among facts otherwise available. 	19 U.S.C.
§1677e(b). An interested party fails to cooperate to “the best of its ability” when it “fails to put forth
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its maximum effort to provide Commerce with full and complete answers to all inquiries.” Nippon
Steel, 337 F.3d at 1382. 	In that regard, a party is obligated to conduct a reasonable inquiry to
investigate the accuracy of information that it submits to Commerce. See PAM, S.p.A v. United
States, 582 F.3d 1336, 1339 (Fed. Cir. 2009). “The statutory trigger for Commerce’s consideration
of an adverse inference is simply a failure to cooperate to the best of [the] respondent’s ability,
regardless of motivation or intent.”24 Nippon Steel, 337 F.3d at 1383.
Commerce applied “total” AFA25 to QTF. IDM 3-5; PDM 17-20. QTF challenges
that determination, arguing that it cooperated to the best of its ability. 	QTF Br. at 11-20. 	The
defendant responds that Commerce determined that QTF provided inconsistent and unreliable
information in its Section A submissions, including its separate rate information; that QTF’s
submissions contained discrepancies indicating that other PRC garlic companies produced the bulk
of 	QTF’s 	claimed 	garlic; 	that 	QTF’s 	attempts 	to 	explain 	those 	discrepancies 	contained
misrepresentations; that QTF failed to cooperate to the best of its ability; and that therefore
Commerce applied facts otherwise available with an adverse inference, disregarded QTF’s separate
24 Further, the purpose of AFA is “to ensure that the party does not obtain a more favorable
result by failing to cooperate than if it had cooperated fully.” Statement of Administrative Action,
Uruguay Round Agreements Act (“SAA”), H.R. Rep. 103-316, reprinted in 1994 U.S.C.C.A.N.
4040, 4197 (1994). Thus, Commerce may consider the extent to which a party may benefit from its
own lack of cooperation when considering the application of an adverse inference. See Nippon Steel,
337 F.3d at 1381-83.
25 “Total” AFA is not referenced in either the statute or the agency’s regulations, but is
understood to refer to a combination of Commerce’s application of the “facts otherwise available”
and “adverse inferences” provisions of 19 U.S.C. §1677e to all determinations with respect to a
company after rejecting as untrustworthy all information submitted by that company in a trade
proceeding. See Yantai Xinke Steel Structure Co. Ltd. v. United States, 36 CIT ___, Slip Op. 12-95
at 4 n.6 (2012).
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rate information, and treated QTF as part of the PRC-wide entity. See, e.g., IDM at 3-5; PDM 17-20.
QTF argues to the contrary, but Commerce’s determinations with respect to QTC are supported by
substantial evidence and in accordance with the law. 	See IDM at 23-27. 	As discussed below,
Commerce’s application of adverse facts available is supported by substantial evidence and in
accordance with the law.
QTF challenges Commerce’s decision for two primary reasons, arguing that (1) “QTF
did process all the garlic shipped,” and (2) QTF “cooperated to the best of its ability.” QTF Br.
11-13. Each of these arguments is unpersuasive. As an initial matter, the question is not, as QTF
argues, whether substantial evidence supports its position, see, e.g., QTF Br. at 11, 13, but whether
Commerce’s decision is supported by substantial evidence. See Eurodif, 555 U.S. at 316 n.6. QTF
contends that the heart of the case is Commerce’s presumption that the PRC authorities required
“strict compliance” with its CIQ certification procedures and asks whether Commerce can “shift the
burden on QTF to provide evidence that the [PRC] authorities were flexible and did not require strict
compliance”, QTF Reply at 6, but the point here is rather that it is QTF that carries the burden of
showing that the record contains no substantial evidence to support Commerce’s findings. Ad Hoc
Shrimp Trade Action Comm. v. United States, 802 F.3d 1339, 1348 (Fed. Cir. 2015) (citing 19
U.S.C. § 1516a(b)(1)(B)(i)). It does not make that showing here, its question essentially impugns
the reasonableness of holding the PRC to its own word (law) on the subject, and substantial evidence
of record supports Commerce’s finding that QTF did not process all of the garlic that it claimed
during the period of review. QTF submitted CIQ forms for the garlic entries it claimed to have
produced during the relevant period, CDoc 91-95 at Ex. 18, but, as Commerce explained, the “vast
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majority” of these CIQ certificates listed inspection bureaus “without jurisdiction” over QTF’s
production facility in Qingdao City. 	IDM at 23. 	Many certificates also showed “CIQ numbers
uniquely associated with producers other than QTF.” 	Id. at 23-24. 	The record thus supports
reasonably concluding that QTF was not the producer of the garlic covered by these certificates
despite QTF’s statements to the contrary and also supports finding that QTF’s questionnaire
responses contained “misrepresentations” regarding the true producer of the relevant garlic in light
of QTF’s representation that it had produced all subject garlic in its facility in Qingdao City. IDM
at 23-24.
Throughout its brief, QTF discusses whether it was the “processor” of the garlic,
which herein is assumed to be synonymous with the question of whether QTF “produced” the garlic
entries, and QTF contends that Commerce refused to credit “irrefutable evidence” that QTF
“produced” all of the garlic in its sales database. QTF Br. at 12. Although QTF’s brief does not
describe the contents of the purportedly “irrefutable” evidence, QTF Br. at 11-12, it presumably
refers to the evidence that it submitted to Commerce in an attempt to overcome the discrepancies in
the CIQ certificates. See, e.g., IDM at 24. Commerce found that QTF’s three arguments to explain
the CIQ discrepancies were “not credible” and showed that QTF’s questionnaire responses
“contained misrepresentations.” IDM at 24, citing CDoc 167.
As its first proffer to Commerce, QTF argued that the location-discrepancies in the
CIQ certificates occurred because of [[ 	]]. CDoc 167 at 3. Commerce
found that the declaration of QTF’s own manager was inconsistent with that theory, instead stating
that [[ 	]]. Id.
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Applicable PRC regulations on the record likewise required that inspections must “take place in the
jurisdiction where the processor/exporter is located.” 	Id. 	Accordingly, QTF’s CIQ certificates
should have been inspected at the Qingdao City bureau with jurisdiction over QTF’s processing
facility, and the fact that many of those certificates reflected other inspection locations is substantial
evidence to support Commerce’s finding that QTF was not the processor for all of its claimed garlic.
See IDM at 24.
Second, QTF argued that it sent the garlic to be inspected in other locations because
they “were better suited for those inspections.” See CDoc 167 at 4. 	However, the record lacks
evidence to support concluding that QTF shipped its garlic from its facility in Qingdao City to
[[ 	]] for inspection and then “back to Qingdao City for export.” Id. To the contrary,
QTF reported that its first shipment occurred on the same date that the CIQ certificate and other
documentation were issued, id., which Commerce found was inconsistent with QTF’s argument that
it shipped garlic back and forth between its own processing facility and inspection bureaus in other
locations. CDoc at 167 at 4.
Third, QTF argued that only one of the other processors listed on its CIQ certificates,
[[ 	]], supplied fresh garlic to QTF. CDoc 167 at 4. QTF speculated that the other entity,
[[ 	]], appeared on the CIQ certificates because it may have been used by an agent to perform
[[ 	]]. Id. Commerce found, however, that such a scheme would have been
inconsistent with PRC regulations, which require inspections to “take place in the same jurisdiction
where the processor/exporting company is located.” Id. 	In any event, QTF’s theory would not
explain why [[ 	]] were listed as the manufacturers of garlic on the CIQ
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certificates. Accordingly, Commerce properly concluded that “it appears that some of the garlic
included in QTF’s sales data base was produced by [[ 	]].” Id. at 5.
QTF also argued that it would make no economic sense for QTF to export garlic
processed by another entity. 	See IDM at 24; see also CDoc 179-81. 	As Commerce explained,
however, QTF increased its exports immediately after Commerce increased the cash deposit rates
for other Chinese exporters. IDM at 26. QTF had a comparatively low cash deposit rate at the time,
and the CIQ records reveal that QTF took advantage of its own low cash deposit rates by exporting
garlic “from third-party processors” at QTF’s low rates. 	Id. 	As Commerce determined, “QTF
clearly had its reasons for engaging in this type of business model.” Id.
QTF argues that Commerce lacks competence to rely on Chinese regulations, because
“[t]here is no record evidence that any [PRC] government authority found a third party was the
processor rather than QTF.” QTF Br. at 13. But, as Commerce explained, “QTF has not provided
any information to support its contention” that the PRC government does not enforce its own CIQ
regulations. IDM at 24. QTF assumes the CIQ certificates are noncompliant with PRC regulations --
by listing inspection locations other than Qingdao City and manufacturers other than QTF -- but QTF
provided no satisfactory reason why Commerce should assume noncompliance rather than
concluding, as it did, that the CIQ certificates were consistent with PRC regulations and showed that
manufacturers other than QTF produced the “bulk” of QTF’s claimed garlic. 	See, e.g., IDM at
23-24.
Given no satisfactory explanation for the record discrepancies in the CIQ certificates,
Commerce found that QTF “misrepresent[ed]” the producers for the “bulk” of the garlic in its sales
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database and failed “to report all of its processors.” 	IDM at 24. 	Without such explanation,
Commerce was also unable to rely on QTF’s submissions regarding (1) factors of production, (2)
affiliated producers, (3) intermediate parties in the production of subject merchandise, and (4)
unaffiliated producers involved in supplying garlic. IDM at 24. Such misrepresentations and/or
omissions, above, are substantial evidence that supports Commerce’s finding that QTF “withheld
requested information, failed to provide requested information by the established deadlines, and
significantly impeded the proceeding.” PDoc 400 at 3. QTF argues that it did respond completely
to Commerce’s requests, QTF Br. at 12, but from Commerce’s perspective “QTF failed to create an
adequate record to explain or otherwise rebut the discrepancies obvious on the face of its CIQ
certificates.” IDM at 24. The court cannot substitute judgment for Commerce’s finding that QTF’s
explanations for the discrepancies were not credible and demonstrated a failure to cooperate to the
best of its ability (see PDoc 400 at 5). Inland Steel Indus., Inc. v. United States, 188 F.3d 1349, 1359
(Fed. Cir. 1999).
QTF also argues that “Commerce failed to specify” what requested information QTF
failed to supply. 	QTF Br. at 11. 	As Commerce explained, however, QTF’s misrepresentations
regarding the producers of its garlic meant that QTF failed to submit necessary information regarding
its garlic production, which, in turn, implicated other information regarding factors of production,
affiliation, and independence from government control. IDM at 23-24; PDoc 400 at 3, 5. And QTF
does not contest that Commerce provided an opportunity to remedy or to explain the deficiencies in
the record. See 19 U.S.C. § 1677m.
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Finally, QTF argues that Commerce’s findings are inconsistent with the Statement
of Administrative Action, which states that:
[N]ational authorities should calculate costs on the basis of exporter’s and producer’s
records, provided that such records are in accordance with generally accepted
accounting principles in the exporting country and reasonably reflect the costs
associated with producing and selling the merchandise.
QTF Br. at 12 n. 44, quoting SAA, H.R. Rep. No. 103-316 (1994) at 139. That section, however,
describes the procedures for calculating sales below cost, a procedure that is not at issue in this case,
nor does anything in the quoted material require Commerce to accept records at the respondent’s
insistence, especially when, as in this case, the record evidence reveals that the respondent
misrepresented important information. See IDM at 24.
Accordingly, Commerce found that “QTF withheld requested information, failed to
provide requested information by the established deadlines, and significantly impeded the
proceeding,” requiring application of facts otherwise available. 	IDM at 23, 	citing 19 U.S.C. §
1677e(a)(2)(A)-(C). 	And because QTF failed to cooperate to the best of its ability, Commerce
applied total adverse facts available. IDM at 23, citing 19 U.S.C. § 1677e(b). On this record, the
court cannot hold Commerce’s finding and the consequence thereof unreasonable.
C. Separate Rate Eligibility
Commerce disregarded QTF’s separate rate information as unreliable, found that QTF
did not establish its eligibility for a separate rate, and applied the underlying presumption of
government control in non-market economy countries. IDM at 25-27. Accordingly, in the final
results Commerce included QTF in the PRC-wide entity and applied the $4.71 per kilogram
PRC-wide rate. Id. at 27. 	QTF argues here that “[t]here is no evidence that QTF was ever part” of
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the PRC-wide entity and that Commerce failed to conduct the necessary analysis with respect to its
separate rate status, and that Commerce should have accepted its separate rate certification. QTF
Br. at 13-16. As discussed below, these arguments are unpersuasive.
In 	NME 	proceedings, 	Commerce 	presumes 	that 	all 	respondents 	are
government-controlled unless a respondent rebuts this presumption by establishing the absence of
de jure and de facto government control. Ad Hoc Shrimp Trade Action Comm. v. United States, 802
F.3d 1339, 1353 (Fed. Cir. 2015). If a respondent fails to establish its independence, Commerce
relies upon the presumption of government control and applies the country-wide rate. Id. Because
the country-wide rate “presumes government control,” Commerce may not apply the country-wide
rate when “the respondent has established independence from government control” -- even if
Commerce has applied AFA to other information by the same respondent. Qingdao Taifa Grp. v.
United States, 33 CIT 1090, 637 F. Supp. 2d 1231, 1098, 1240-41 (2009) (citation omitted). Several
decisions have held that Commerce may not disregard separate rate information when “there is no
indication that any necessary information was missing or incomplete.” See, e.g., Shandong Huarong
General Group v. United States, 27 CIT 1568, 1594 (2003) (citation omitted).
Nevertheless, Commerce may disregard a company’s separate rate submission if the
record supports finding that the submission consists entirely of information derived from unreliable
sources. See, e.g., Fresh Garlic Producers Ass’n v. United States, 39 CIT ___, ___, 121 F. Supp.
3d 1313, 1328 (2015) (“Commerce’s determination that a party is not entitled to a separate rate
because its separate rate information is unreliable must be based on substantial evidence”) (citing
Gerber Food (Yunnan) Co. v. United States, 29 CIT 753, 772, 387 F. Supp. 2d 1270, 1287 (2005));
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Hebei Golden Bird Trading Co. v. United States, 41 CIT ___, Slip Op. 17-86 (July 17, 2017) at 11
(information impugning separate rate submissions provides substantial evidence to support
determination of ineligibility for separate rate); Jiangsu Changbao Steel Tube Co. v. United States,
36 CIT ___, ___, 884 F. Supp. 2d 1295, 1310 (2012) (finding specific evidence on the record to
support concluding that a separate rate application presents no reliable evidence).
As outlined above, Commerce found that QTF misrepresented that it was the producer
of its subject merchandise. IDM at 24-25. This misrepresentation appeared in QTF’s Section A
questionnaire responses, and revealed deficiencies in other portions of the same responses, including
the separate rate information. Id. at 25. 	Commerce found that QTF failed to submit “complete
information regarding QTF’s relationships with other entities that produced the bulk of its subject
merchandise”. Id. Those other entities were not part of this review, did not establish separate rate
status, and are thus presumed to be part of the PRC-wide entity. 	See, e.g., CDoc 15. QTF’s
relationship with those entities, in turn, implicated “whether QTF was subject to government
control.” IDM at 25. “Given QTF’s implausible explanations” and misrepresentations, Commerce
found that it was “unable to consider any information in QTF’s Section A response, and specifically
its information relating to government control.” Id. Accordingly, Commerce disregarded QTF’s
separate rate information as unreliable and treated QTF as part of the PRC-wide entity. Id.
Commerce’s decision to disregard QTF’s separate rate information is supported by
substantial evidence and complies with the law. This case is similar to Jiangsu, on which the court
sustained Commerce’s decision to disregard the respondent’s separate rate application because of
deficiencies in that application. See Jiangsu, 884 F. Supp. 2d at 1310. Therein, Commerce found
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that company officials had misled during verification and that the company’s computer software was
unreliable. 	Id. at 1303. 	Because the respondent’s separate rate application contained only
representations by the discredited officials, Commerce denied the separate rate application. Id. at
1309. 	As the court explained, Commerce’s decision was based on “specific findings” that the
respondent’s “submissions regarding government control were not credible.” Id. The court further
explained that Commerce’s decision was not based solely on an indiscriminate adverse inference,
but instead determined that the separate rate application itself was “unreliable.” Id. at 1310.
In this case, Commerce likewise found QTF’s separate rate information unreliable.
See IDM at 25-27. Because of QTF’s “misrepresentations” regarding the producers of its garlic,
Commerce reasonably found that it could not trust QTF’s related answers regarding its relationship
with other producers or exporters. See IDM at 25. Those answers appeared in the separate rate
portion of the Section A questionnaire response. PDoc 163 at A-2--A-11. As Commerce explained,
it “did not receive complete information regarding QTF’s relationships with other entities that
produced the bulk of its subject merchandise . . . , which may have included information relating to
whether QTF was subject to government control.” IDM at 25.
QTF’s answers regarding its relationship with other producers comprise a key part
of the separate rate portion of the Section A questionnaire. PDoc 163 at A-3. That portion of the
questionnaire asks for information regarding QTF’s “relationship with other producers or exporters,”
and whether QTF “coordinate[d] with other exporters in setting prices”. PDoc 163 at A-3, A-8.
QTF responded, in relevant part, that it “has no relationship with any other producer or exporter of
the merchandise under consideration.” 	PDoc 163 at A-3. 	QTF further stated that it “does not
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coordinate with other exporters in setting prices.” PDoc 163 at A-8. Given QTF’s misrepresentation
regarding the producers of its garlic, Commerce reasonably concluded that it could not rely on QTF’s
responses in the separate rate portion of the Section A questionnaire. See IDM at 25.
As in Jiangsu, QTF’s material misrepresentations support Commerce’s finding that
QTF’s representations in the separate rate portion of the questionnaire were unreliable. Cf. IDM at
25 with Jiangsu, 884 F. Supp. 2d at 1309-10. Indeed, Commerce possesses authority, pursuant to
section 1677m(d), to “disregard all or part of the original and subsequent responses” when a
respondent fails to satisfactorily remedy a deficiency. See 19 U.S.C. §§ 1677e(a)(2), 1677m(d).
Pursuant to such authority, Commerce properly found that “QTF’s implausible explanations” left
Commerce unable to consider “any information in QTF’s Section A response,” including “its
information relating to government control.” IDM at 25.
The Court of Appeals for the Federal Circuit, moreover, has repeatedly held that
Commerce may disregard all of respondent’s data when a deficient questionnaire response implicates
“core” information. See, e.g., Ad Hoc Shrimp Trade Action Committee v. United States, 802 F.3d
1339, 1357 (Fed. Cir. 2015), citing Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d
1333, 1348 (Fed. Cir. 2011). That precedent applies in this case because Commerce found that
“QTF’s misrepresentations pervade the data in the record, including its Section A responses
regarding its entitlement to separate rate status.” CDoc 167 at 5.
QTF argues “[t]here is no evidence that QTF was ever part of the PRC-wide entity.”
QTF Br. at 13. 	But that argument inverts the underlying presumption in non-market economy
reviews that the respondent is subject to government control. See, e.g., Sigma Corp. v. United States,
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117 F.3d 1401, 1405 07 (Fed. Cir. 1997). That presumption is valid and has been upheld by the
Federal Circuit. See id.; Huaiyin For. Trade Corp. v. United States, 322 F.3d 1369, 1372 (Fed. Cir.
2003); see also Diamond Sawblades Manufacturers Coalition v. United States, 866 F.3d 1304, 1311
(Fed. Cir. 2017) (“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”)
(citations omitted). The burden rests on QTF to demonstrate that it is independent from government
control. 	See Sigma, 117 F.3d at 1405-07. 	Commerce found that QTF had not made such a
demonstration because the separate rate information in QTF’s Section A questionnaire response is
unreliable and deficient, thus the presumption of government control remained. The court cannot
conclude Commerce’s disregard of that information and application of the underlying presumption
of government control improper on this record.
QTF further contends that “[t]he location where garlic is inspected establishes no
evidence of ownership or control.” QTF Br. at 13. But Commerce reasonably explained that QTF’s
misrepresentations implicate its relationships with other PRC garlic producers, which are presumed
to be under government control. See, e.g., IDM at 25-27. Indeed, neither of the companies listed
on QTF’s CIQ certificates participated in this review or was eligible for a separate rate, and were
therefore presumed to be subject to PRC government control. See, e.g., CDoc 15; CDoc 167 at 4
(listing the companies on QTF’s CIQ certificates). 	QTF’s undisclosed relationship with those
companies supports treating QTF as part of the PRC-wide entity.
QTF next argues that Commerce’s decision is inconsistent with other cases when the
Court has held “that Commerce cannot apply the PRC-wide rate to a company that has established
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its independence from Chinese government control.” QTF Br. at 13-14, citing, inter alia, Shenzhen
Xinboda Indus. Co. v. United States, 40 CIT ___, 180 F. Supp. 3d 1305 (2016); FGPA v. United
States, 40 CIT ___, ___, 180 F. Supp. 3d 1233, 1237 (2016); Yantai Xinke Steel Structure Co. v.
United States, 36 CIT ___, Slip Op. 12-95 at 26-27 (July 18, 2012). It cites, for example, a case in
which the court remanded a decision in which Commerce disregarded separate rate information
solely because of “deficiencies” in the respondent’s “sales data.” QTF Br. at 14, citing Xinboda, 40
CIT at ___, 180 F. Supp. 3d at 1316.
Unlike 	the 	referenced 	decisions, 	however, 	Commerce 	made 	specific 	and
particularized findings regarding QTF’s misrepresentation and the resulting deficiencies in QTF’s
separate rate information. See IDM at 25-26. As discussed above, this case instead parallels the
Jiangsu decision sustaining Commerce’s application of the PRC-wide rate, because QTF’s
misrepresentations led to deficiencies that pervade its separate rate submissions. See Jiangsu, 884
F. Supp. 2d at 1309. In this case, moreover, Commerce made a finding that QTF’s “separate rate
responses were inaccurate or deficient,” and its decision to reject QTF’s separate rate information
is “based on substantial evidence.” See Xinboda, 180 F. Supp. 3d at 1316 (citation omitted).
QTF nonetheless argues that Commerce should have accepted its separate rate
certification, citing “Commerce procedures” that a company must submit such a certification to show
eligibility for the separate rate. QTF Br. at 15, citing FGPA, supra, 180 F. Supp. 3d at 1237. As the
separate rate certification form states, however, merely submitting the certificate does not
automatically guarantee a separate rate. PDoc 45 at 4. Rather, Commerce may conclude that a firm
is not eligible for a separate rate if it fails to “furnish supporting documents as requested” by
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Commerce. 	Id. at 2. 	Further, a company selected as a mandatory respondent, like QTF, must
respond to the AD “questionnaire in full in order to retain eligibility for consideration of separate
rate status.” Id. Merely submitting the separate rate certificate does not inoculate QTF against its
misrepresentations and deficiencies in the Section A questionnaire response. See IDM at 24-26.
Commerce reasonably rejected QTF’s separate rate information.
Based on the general proposition that Commerce must provide an adequate basis for
its conclusions, QTF next contends that Commerce failed to “articulate the standard” it used in
disregarding QTF’s separate rate information. Id. at 22 (citing Rhone Poulenc, Inc. v. United States,
20 CIT 573, 574-75, 927 F. Supp. 451, 454 (1996)). But, Commerce explained that it was applying
the statutory adverse facts available framework based on the deficiencies in QTF’s separate rate
submission. See IDM at 23-26; see also PDM at 9-14; CDoc 167 at 3-6. Commerce described that
framework in detail, including the procedures for respondents to remedy a deficiency and the
consequences for failing to do so. See PDM at 9-10, citing 19 U.S.C. § 1677m. Commerce also
explained the circumstances in which it may apply facts otherwise available, and an adverse
inference. See id. at 9-10, citing 19 U.S.C § 1677e. Applying those procedures, Commerce detailed
the deficiencies in QTF’s Section A questionnaire response regarding the separate rate. See IDM at
25; PDM at 14. 	Accordingly, Commerce properly exercised its discretion to disregard those
responses. See 19 U.S.C. § 1677e, 1677m(d).
Finally, QTF restates its arguments that Commerce erred in applying the adverse facts
available standard. QTF Br. at 15, 17-19. It argues, for example, that Commerce failed to find that
“QTF’s separate rate responses were inaccurate or deficient,” id. at 17, and maintains that QTF “did
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not withhold any information requested by Commerce,” id. at 18 (citing Ad Hoc Shrimp Trade
Action Committee v. United States, 802 F.3d 1339 (Fed. Cir. 2015); 19 U.S.C. §1677e(a)(2)(A)-(D)).
However, substantial evidence of record supports Commerce’s determination that QTF did
“withhold” or failed to provide correct information regarding the producers of its garlic, thereby
rendering unreliable its responses regarding relationships with other producers, which is central to
the separate rate analysis. See, e.g., IDM at 25; see also id. at 23.
And despite QTF’s argument that it “did cooperate” to the best of its ability, id. at 15,
19, substantial evidence also supports Commerce’s finding that QTF misrepresented the identity of
its garlic producers. See IDM at 23, 25. The Federal Circuit has explained that although the “best
of its ability” standard “does not require perfection and recognizes that mistakes sometimes occur,”
it “does not condone inattentiveness, carelessness, or inadequate record keeping.” Nippon Steel
Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003). 	Commerce found that QTF’s
misrepresentations in this case qualified as a failure to cooperate. See IDM at 25. This case is akin
to Ad Hoc Shrimp, cited in QTF’s brief, when Commerce considered “evidence indicating that the
exporter’s statements were false.” QTF Br. at 19, citing Ad Hoc Shrimp, 802 F.3d at 1356. Like the
respondent in Ad Hoc Shrimp, Commerce found that QTF misrepresented important information and
did not provide correct information when given the opportunity to correct the deficiencies. See id.;
see also IDM at 23, 25. Those findings merit deference. See, e.g., Fujian Machinery & Equip. Imp.
& Exp. Corp. v. United States, 25 CIT 1150, 1156 n.7, 178 F. Supp. 2d 1305, 1314 n.7 (2001). QTF
contends Commerce did not provide “chance to rebut” pursuant to 19 U.S.C. §1677m(d), see QTF
Reply at 7, but the fact of the matter is that during the course of the proceeding, and as a
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consequence of Commerce’s findings on QTF’s submissions for and explanations of the record, it
is QTF that failed to rebut the presumption of state control.
IV. Conclusion
In accordance with the foregoing, Commerce’s final results must be, and hereby are,
remanded for reconsideration of the determination to reject Xinboda’s September 17, 2015
submission of information related to economic comparability and factors of production for Mexico.
The results of remand shall be due March 1, 2018. Within five business day after those results are
docketed, the parties shall confer and submit a proposed schedule for filing comments on the remand
results.
With respect to QTF, the 20th AR Final Results must be, and hereby are, sustained.
Interested parties are requested to comment by December 15, 2017 on whether the redactions in this
opinion are correct, and also whether there is any “just reason” for delaying issuance of final
judgment with respect to Commerce’s final results for QTF, see USCIT Rule 54(b).
So ordered.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: December 5, 2017
New York, New York
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