Shanghai Sunbeauty Trading Co., Ltd. v. United States

Slip Op. 18–111
UNITED STATES COURT OF INTERNATIONAL TRADE
__________________________________________
:
SHANGHAI SUNBEAUTY TRADING CO., 	:
LTD., 	:
:
Plaintiff, 	:
:
v. 	: 	Court No. 17-00089
:
UNITED STATES, 	: 	Before: Richard K. Eaton, Judge
:
Defendant, 	: 	PUBLIC VERSION
:
and 	:
:
AMERICAN HONEY PRODUCERS 	:
ASSOCIATION, et al., 	:
:
Defendant-Intervenors. 	:
__________________________________________:
OPINION
[United States Department of Commerce’s final rescission determination is sustained.]
Dated: September 6, 2018
Fei He, Law Offices of He & Associates, P.C., of Irvine, CA, argued for plaintiff.
Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief
were Chad A. Readler, Principal Deputy Assistant Attorney General, Jeanne E. Davidson,
Director, and Reginald T. Blades, Jr., Assistant Director. Of Counsel on the brief was Nanda
Srikantaiah, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S.
Department of Commerce, of Washington, DC.
Michael J. Coursey, Kelley Drye & Warren LLP, of Washington, DC, argued for
defendant-intervenors. With him on the brief were R. Alan Luberda and Joshua R. Morey.
Eaton, Judge: Before the court is the motion for judgment on the agency record of
plaintiff Shanghai Sunbeauty Trading Co., Ltd. (“plaintiff” or “Sunbeauty”), an exporter of
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honey from the People’s Republic of China. See Pl.’s Br. Supp. Mot. J. Agency R., ECF No. 27
(“Pl.’s Br.”); see also Pl.’s Reply Br. Supp. Mot. J. Agency R., ECF No. 36 (“Pl.’s Reply Br.”).
By its motion, Sunbeauty challenges the United States Department of Commerce’s (the
“Department” or “Commerce”) rescission of the new shipper review of its honey sales to the
United States during the period of review of December 1, 2014, to November 30, 2015 (“POR”).
See Honey From the People’s Rep. of China, 82 Fed. Reg. 15,697 (Dep’t Commerce Mar. 30,
2017) (final rescission of the new shipper rev.), and accompanying Issues and Dec. Mem., P.R.
150, bar code 3554991-01, ECF No. 38 at tab 2 (“Final I&D Memo”) (collectively, “Final
Rescission Determination”). 1 Plaintiff contests the Department’s determination that Sunbeauty’s
sales to its U.S. importer were not bona fide. 2 Sunbeauty therefore asks the court to remand this
matter to Commerce with instructions to calculate a dumping margin for its products. See Pl.’s
Mot. J. Agency R., ECF No. 26.
The 	defendant 	United 	States 	(“defendant” 	or 	the 	“Government”), 	on 	behalf 	of
Commerce, and defendant-intervenors American Honey Producers Association and Sioux Honey
Association, urge the court to sustain the Final Rescission Determination as supported by
substantial evidence and otherwise in accordance with law. See Def.’s Resp. Pl.’s Mot. J. Agency
1 	Though the Final Rescission Determination is on the public record (“P.R.”),
Commerce’s bona fides analysis is contained primarily in two confidential memoranda, the Bona
Fides Analysis Memorandum and the Business Proprietary Information Memorandum. See Bona
Fides Analysis of Honey from the People’s Rep. of China for Sunbeauty (Nov. 30, 2016), C.R.
67, ECF No. 38 at tab 6 (“Bona Fides Memo”); Business Proprietary Information Mem. for
Sunbeauty (Mar. 24, 2017), C.R. 73, ECF No. 38 at tab 3. Where the court refers to information
from the confidential record (“C.R.”), it appears in double brackets.
2 	Sunbeauty made [[ 	]] sales of [[ 	]] honey during the POR. It
is with respect to these sales that Commerce made its bona fides determination. See Bona Fides
Memo at 2, 6.
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R., ECF No. 32 (“Def.’s Br.”); see also Def.-Ints.’ Opp’n Pl.’s Mot. J. Agency R., ECF No. 34
(“Def.-Ints.’ Br.”).
The court has jurisdiction under 28 U.S.C. § 1581(c) (2012), and, for the following
reasons, sustains Commerce’s Final Rescission Determination.
BACKGROUND
Imports of honey from China have been subject to an antidumping duty order since 2001.
See Honey From the People’s Rep. of China, 66 Fed. Reg. 63,670, 63,671 (Dep’t Commerce
Dec. 10, 2001). On December 17, 2015, Sunbeauty asked Commerce to conduct a new shipper
review of its honey sales during the POR. See Letter to the Sec’y from Sunbeauty (Dec. 17,
2015), C.R. 1, ECF No. 38 at tab 12. Through this review, Sunbeauty sought an individual
dumping margin.
On January 27, 2016, Commerce initiated the new shipper review and thereafter
requested sales and other information from Sunbeauty and its U.S. importer 3 by way of
questionnaires. See Honey From the People’s Rep. of China, 81 Fed. Reg. 5710 (Dep’t
Commerce Feb. 3, 2016); see also Bona Fides Analysis of Honey from the People’s Rep. of
China for Sunbeauty (Nov. 30, 2016), C.R. 67, ECF No. 38 at tab 6 (“Bona Fides Memo”) at 2.
In its questionnaire responses, Sunbeauty reported that it sold honey to its importer
during the POR, and that each sale was for the same amount and the same price. 4 Moreover, each
3 	Sunbeauty’s unaffiliated U.S. importer was [[ 	]]. See
Bona Fides Memo at 2.
4 	Each sale was for an amount of [[ 	]] kilograms at the price of [[ 	]].
See Bona Fides Memo at 2.
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sale consisted of the same number (272) of two-liter bottles of honey. See Bona Fides Memo
at 4. According to an online conversion tool, a two-liter bottle of honey would contain in excess
of six pounds of honey. 5 Sunbeauty’s importer entered the honey under a Harmonized Tariff
Schedule of the United States (“HTSUS”) subheading that covered honey bound for the
wholesale market. 6
In its Bona Fides Memo, the Department considered the factors set out in 19 U.S.C.
§ 1675(a)(2)(B)(iv) 7 to determine whether Sunbeauty’s POR sales were bona fide. That is,
Commerce sought to determine whether the sales were commercially reasonable or typical of
normal business practices and would be representative of the company’s sales should it receive a
separate rate. See Bona Fides Memo at 5; Final I&D Memo at 5. In evaluating the statutory
factors, Commerce determined, among other things, that the sales price, quantities, and certain
expenses arising from the sales, together with Sunbeauty’s failure to provide certain requested
5 	See Online Food Calculator, https://www.aqua-calc.com/calculate/food-weight-
to-volume (last visited Aug. 31, 2018).
6 	Plaintiff’s honey was entered under HTSUS subheading [[ 	]], which
covers [[
]]. See Bona Fides Memo at 2 (emphasis added).
7 	These factors are: “the prices of such sales”; “whether such sales were made in
commercial quantities”; “the timing of such sales”; “the expenses arising from such sales”;
“whether the subject merchandise involved in such sales was resold in the United States at a
profit”; “whether such sales were made on an arms-length basis”; and “any other factor
[Commerce] determines to be relevant as to whether such sales are, or are not, likely to be
typical of those the exporter or producer will make after completion of the review.” 19 U.S.C.
§ 1675(a)(2)(B)(iv)(I)-(VII) (Supp. IV 2016).
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documentation, and its admission of negligence in preparing certain record documents, weighed
in favor of finding that the sales were not bona fide. 8 See Final I&D Memo at 6-12.
As to sales price, Commerce compared the average unit value for Sunbeauty’s entries to
(1) the average unit value for imports under the HTSUS subheading that Commerce found most
specifically described Sunbeauty’s honey, 9 and (2) the weighted-average unit value for all of the
entries made under the appropriate broader HTSUS subheading, i.e., 0409, during the POR. 10
See Bona Fides Memo at 6. In like manner, with respect to quantity, the Department compared
the quantity of Sunbeauty’s entries to the amount of honey (in kilograms) entered during the
POR under (1) the HTSUS subheading that Commerce found most specifically described
Sunbeauty’s honey, and (2) HTSUS subheading 0409. The price and quantity figures Commerce
used for purposes of making these comparisons are derived from proprietary U.S. Customs and
Border Protection (“Customs”) data. 11 Based on these comparisons, the Department found “the
8 	Commerce concluded that the other statutory factors under § 1675(a)(2)(B)(iv),
i.e., the timing of the sales, profit on resale, and the arms-length nature of the transactions, did
not weigh against a finding that the sales subject to the new shipper review were bona fide. See
Bona Fides Memo at 8-9. Commerce’s findings with respect to these factors are not in dispute.
9 	Commerce found that HTSUS subheading [[
]] most specifically
described Sunbeauty’s honey. See Bona Fides Memo at 5.
10 	Each of the [[ 	]] entries made under the subheadings of HTSUS 0409 is
identified in the record as a “Type 03” or “Type 07” entry, which is a designation that means the
“[m]erchandise [was] subject to an antidumping or countervailing duty order . . . .” Bona Fides
Memo at 3-4; see also Memo to File, Customs Data of U.S. Imports of Honey (Nov. 30, 2016),
C.R. 68, ECF No. 38 at tab 14 (“Customs Data Memo”).
11 	The following table contains proprietary Customs data on honey imports from
China during the POR found in Attachment I to the Customs Data Memo:
(footnote continued . . .)
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price of Sunbeauty’s sales to be unusually high and the quantity to be unusually low, indicating
the sales under review are non-bona fide.” Final I&D Memo at 9 (emphasis added).
For expenses, Commerce considered a “lump sum fee” that Sunbeauty reported paying to
its logistics vendor. 12 See Sunbeauty’s Resp. Suppl. Sec. A Quest. (June 7, 2016) at 11, C.R. 35,
ECF No. 38 at tab 21. When asked to “provide a more complete and detailed description of this
expense,” Sunbeauty responded that it “mainly refer[red] to the charge for the service provided
for export customs declaration,” and that the “‘Lump Sum Fee’ is based on the service
provided.” Sunbeauty’s Resp. Suppl. Sec. A, C Quest. (July 21, 2016) at 3, C.R. 38-42, ECF No.
38 at tab 16. When Commerce then asked that Sunbeauty “[d]etail all of the services” the vendor
provided for the lump sum fee, Sunbeauty reported that, according to its vendor, the lump sum
“include[d] customs clearance fee and drayage fee.” Sunbeauty’s Resp. Suppl. Sec. A, C & D
Quest. (Sept. 1, 2016) at 3, C.R. 54-57, ECF No. 38 at tab 15. Commerce found that Sunbeauty’s
responses were inconsistent and failed to identify the service(s) covered by the lump sum.
[[
]]
12 	“Sunbeauty reported that it contracted with [[
]] to handle the logistics and export procedures of its sales of subject merchandise
to the United States.” Bona Fides Memo at 7.
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Commerce found, therefore, that “while not dispositive, these unexplained expenses arising from
the transaction contribute to our finding that Sunbeauty’s sales are non-bona fide.” Bona Fides
Memo at 8; Final I&D Memo at 10.
Additionally, Commerce found not dispositive, but considered, Sunbeauty’s failure to
provide certain requested documentation, and its admission that it had been “negligent” in
preparing certain paperwork that Sunbeauty placed on the record. See Final I&D Memo at 12-13
(“Sunbeauty’s self-described ‘negligence when preparing’ the invoices it later submitted to the
Department raises concerns about Sunbeauty’s submissions as a whole and also the bona fides of
Sunbeauty’s sales, because this significant discrepancy means that the importer and, ultimately,
the final U.S. customer made purchasing decisions with respect to the sale of Sunbeauty’s honey
without complete and accurate information.”).
Accordingly, the Department preliminarily determined that “based on the totality of the
circumstances the sales subject to this [new shipper review] [were] non-bona fide pursuant to [19
U.S.C. § 1675(a)(2)(B)(iv)].” Dec. Mem. for the Prelim. Results of the Antidumping Duty New
Shipper Rev. of Honey from the People’s Rep. of China: Sunbeauty (Nov. 29, 2016), P.R. 134,
bar code 3526385-01, ECF No. 38 at tab 5 (“Preliminary Decision Memo”) at 1. Commerce
concluded, therefore, that it could not “rely on these sales to calculate a dumping margin,” and,
further, “there [were] no sales on which [it could] base [its] review.” Preliminary Decision
Memo at 4. Consequently, the Department preliminarily rescinded the new shipper review.
On March 30, 2017, Commerce published its Final Rescission Determination, in which it
continued to find that Sunbeauty’s sales were not bona fide, and therefore, could not provide a
basis on which to calculate a dumping margin for Sunbeauty. See 82 Fed. Reg. at 15,697.
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Accordingly, the Department rescinded the new shipper review. See Final I&D Memo at 1. This
appeal followed.
STANDARD OF REVIEW
The court will sustain a determination by Commerce unless it is “unsupported by
substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i) (2012).
LEGAL FRAMEWORK
Under the antidumping statute, an exporter or producer that did not export to the United
States during the original period of investigation (and is not affiliated with an exporter or
producer that did), i.e., a “new shipper,” may ask Commerce to review its U.S. sales of subject
merchandise and calculate an individual weighted-average dumping margin applicable to the
new shipper. See 19 U.S.C. § 1675(a)(2)(B)(i); see Jinxiang Yuanxin Import & Export Co. v.
United States, 39 CIT __, __, 71 F. Supp. 3d 1338, 1344 (2015); Shandong Chenhe Int’l Trading
Co. v. United States, 34 CIT 1472, 1482, Slip Op. 10-129 at 20 (Nov. 22, 2010) (“The purpose of
a new shipper review is to determine an individual antidumping margin for an importer that did
not receive a separate rate under an antidumping duty order.”). To calculate an accurate margin
for a new shipper, “Commerce must examine sales data that is indicative of the respondent’s
normal business practices so as to judge its future commercial behavior.” Shandong Chenhe, 34
CIT at 1482, Slip Op. 10-129 at 20 (citation omitted). If the evidence of the POR sales on the
record is “not indicative of typical business practices, no accurate individual rate can be set.” Id.
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Commerce determines the new shipper’s dumping margin by comparing the “normal
value and export price (or constructed export price) of each entry of the subject merchandise”
during the POR. 19 U.S.C. § 1675(a)(2)(A)(i); see Tianjin Tiancheng Pharm. Co. v. United
States, 29 CIT 256, 259, 366 F. Supp. 2d 1246, 1249 (2005). When calculating export price,
Commerce excludes U.S. sales that are not bona fide. 13 19 U.S.C. § 1675(a)(2)(B)(iv) (providing
that the new shipper’s individual margin “shall be based solely on the bona fide United States
sales of [the] exporter or producer, as the case may be, made during the period covered by the
review.”). Commerce determines whether the sales are bona fide based on several statutory
factors. In particular, the statute directs that Commerce “shall consider, depending on the
circumstances surrounding such sales”:
(I) the prices of such sales;
(II) whether such sales were made in commercial quantities;
(III) the timing of such sales;
13 	The law’s requirement that the U.S. sales must be bona fide was a response to
concerns about the reported abuse of a previous rule that permitted an importer to post a bond, in
lieu of a cash deposit, to secure payment of antidumping duties during the pendency of a new
shipper review. This Court has summarized these concerns, as follows:
For example, one method of abuse by exporters subject to high antidumping duty
rates was to “enter into a scheme to structure a few sales to show little or no
dumping” and obtain an expedited new shipper review. The atypical sales resulted
in a zero or low antidumping duty rate. This allowed the importer to bring large
quantities of the subject merchandise into the United States at “highly dumped . . .
prices but with little or no cash deposit.” By the time Commerce conducted an
annual review of those subsequent sales and assigned the final duty rate, the
importer could disappear or become nonresponsive, leaving Customs and Border
Protection unable to collect the duties.
Haixing Jingmei Chem. Prod. Sales Co. v. United States, 41 CIT __, __, 277 F. Supp. 3d 1375,
1381 n.7 (2017) (quoting and citing H.R. Rep. No. 114–114, pt. 1, at 89 (2015)).
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(IV) the expenses arising from such sales;
(V) whether the subject merchandise involved in such sales was resold in the
United States at a profit;
(VI) whether such sales were made on an arms-length basis; and
(VII) any other factor [Commerce] determines to be relevant as to whether such
sales are, or are not, likely to be typical of those the exporter or producer will
make after completion of the review.
19 U.S.C. § 1675(a)(2)(B)(iv). These statutory factors codify Commerce’s “totality of the
circumstances” test. See Haixing Jingmei Chem. Prod. Sales Co. v. United States, 41 CIT __, __,
277 F. Supp. 3d 1375, 1382 (2017) (citing Trade Facilitation and Trade Enforcement Act of
2015, Pub. L No. 114–125, § 433, 130 Stat. 122 (2016)).
Commerce’s regulations provide for rescission of a review where “there has not been an
entry and sale to an unaffiliated customer in the United States of subject merchandise” during the
POR. See 19 C.F.R. § 351.214(f)(2)(i) (2016). “Commerce interprets the term ‘sale’ in [19
C.F.R.] § 351.214(f)(2)(i) to mean that a transaction it determines not to be a bona fide sale is,
for purposes of the regulation, not a sale at all.” Shijiazhuang Goodman Trading Co. v. United
States, 40 CIT __, __, 172 F. Supp. 3d 1363, 1373 (2016). Thus, if Commerce determines that
none of a new shipper’s U.S. sales during the POR were bona fide, it must end the review
because “no data will remain on the export price side of Commerce’s antidumping duty
calculation.” Tianjin, 29 CIT at 259, 366 F. Supp. 2d at 1249.
DISCUSSION
At 	the 	heart 	of 	this 	case 	is 	whether 	substantial 	evidence 	supports 	Commerce’s
determination that Sunbeauty’s sales during the POR were not bona fide. For plaintiff, the record
does not support: (1) Commerce’s use of averages as a means to compare the price and quantity
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of Sunbeauty’s sales to other POR entries of subject merchandise; (2) Commerce’s decision to
compare Sunbeauty’s sales, which plaintiff argues were not bound for the wholesale market, 14
with POR entries under the HTSUS subheading that Commerce found most specifically
described Sunbeauty’s sales; (3) Commerce’s finding that Sunbeauty’s questionnaire responses
were inconsistent and failed to explain a reported “lump sum fee”; and (4) Commerce’s finding
that 	certain 	deficiencies 	and 	discrepancies 	in 	Sunbeauty’s 	questionnaire 	responses, 	and
Sunbeauty’s admission that it prepared certain paperwork on the record negligently, supported its
non-bona fide determination. As will be seen, however, none of Sunbeauty’s arguments persuade
the court that remand is required here.
I. 	Substantial 	Evidence 	Supports 	Commerce’s 	Use 	of 	Averages 	as 	a 	Means 	to
Compare the Price and Quantity of Sunbeauty’s Sales to Those of Other POR
Entries of Subject Merchandise
In the Final Rescission Determination, the Department found “the price of Sunbeauty’s
sales to be unusually high[15] and the quantity to be unusually low,[16] indicating the sales under
14 	Sunbeauty makes this argument even though its honey was entered under HTSUS
subheading [[ 	]], which covers [[
]]. Bona Fides Memo at 2 (emphasis added).
The HTSUS subheading that Commerce found most specifically described Sunbeauty’s sales,
[[ 	]], covers [[
]]. Bona Fides Memo at 4.
15 	In particular, with respect to price, Commerce stated:
[[ 	]] of Sunbeauty’s [[ 	]] honey sales was for [[ 	]],
and the quantity for each was [[ 	]] kilograms, resulting in a unit value of
[[ 	]] per kilogram. . . . The . . . [average unit value] . . . for entries under
HTSUS [[ 	]] is [[ 	]], making Sunbeauty’s [average unit value]
[[ 	]]. The [weighted-average unit value] for . . . entries of subject
(footnote continued . . .)
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review [were] non-bona fide.” Final I&D Memo at 9. The Department arrived at its conclusion,
as to price, by comparing the average unit value for Sunbeauty’s entries to (1) the average unit
value for imports under the HTSUS subheading that Commerce found most specifically
described Sunbeauty’s honey, and (2) the weighted-average unit value for imports under the
appropriate broader HTSUS subheading, i.e., 0409, during the POR. Similarly, with respect to
quantity, the Department compared the average quantity of Sunbeauty’s entries to (1) the average
quantity of imports under the HTSUS subheading that Commerce found most specifically
described Sunbeauty’s honey, and (2) the average quantity of imports under HTSUS subheading
0409 during the POR. See Bona Fides Memo at 5-7.
Before Commerce, Sunbeauty argued that instead of comparing average prices and
quantities, the Department should compare “the quantity and unit values of Sunbeauty’s entries
merchandise under subheading 0409 is [[ 	]]. In comparison, the [average
unit value] for Sunbeauty’s sale(s) of subject merchandise is [[ 	]].
Bona Fides Memo at 6. Based on these comparisons, Commerce found “the [average unit value]
for Sunbeauty’s sale(s) to be significantly [[ 	]] in relation to the unit values of other POR
entries from [China] of known subject merchandise.” Bona Fides Memo at 6. It is worth noting
that there was [[ 	]].
16 	With respect to quantity, Commerce stated:
Each of Sunbeauty’s [[ 	]] honey sales was for [[ 	]]
kilograms, or a total quantity of [[ 	]] kilograms. . . . The average quantity
for POR entries from [China] of entries under HTSUS [[ 	]] is
[[ 	]] kilograms. In comparison, the average quantity of Sunbeauty’s sales,
[[ 	]] kilograms, was [[ 	]]. The average quantity for POR
entries from [China] of entries under subheading 0409 subject to antidumping or
countervailing duties is [[ 	]] kilograms. In comparison, the average
quantity of Sunbeauty’s sales was [[ 	]].
BPI Memo at 6-7. Based on these comparisons, Commerce found “the quantities of Sunbeauty’s
U.S. sales of [[ 	]] honey to be [[ 	]] in relation to the quantities of other
POR entries under HTSUS [[ 	]] and . . . subheading 0409 . . . .” BPI Memo at 7.
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with the range[17] of quantity and unit values as found in [Customs] data of entries under HTSUS
subheading 0409.” Final I&D Memo at 2-3 (emphasis added). Sunbeauty maintained that, under
the range method, the record evidence supported the conclusion that its sales were bona fide
because its POR sales were not the highest in terms of price or lowest in terms of quantity,
according to Customs data. See Final I&D Memo at 3. Thus, for Sunbeauty, using a range
method to examine its sales, they would not be found aberrational in terms of sale price or
volume. See Hyundai Steel Co. v. United States, 42 CIT __, __, Slip Op. 18-80 at 46 (June 28,
2018) (“A sale is aberrational when it deviates from the usual or normal way or may be regarded
as atypical.”) (citation omitted).
Commerce disagreed, however, that range was the appropriate method to use based on
the record here. 18 For Commerce, while the price and quantity of Sunbeauty’s sales may have
17 	The range method has been found to be appropriate when a gradual curve in
pricing exists. For example, in Frozen Fish Fillets, Commerce compared the price and quantity
of a new shipper’s sale to the averages of Customs data, and observed that a new shipper’s price
“[did] not appear to be an outlier when compared to other prices evidenced in the [Customs]
data.” Certain Frozen Fish Fillets From the Socialist Rep. of Vietnam, 74 Fed. Reg. 11,349
(Dep’t Commerce Mar. 17, 2009), and accompanying Issues and Dec. Mem., Cmt. 8.
18 	Commerce stated:
The [Customs] data on the record for this new shipper review does not support a
use of range as a means of comparison because it contains [[ 	]] entries with
values much [[ 	]] and quantities much [[ 	]] than those of the other
entries. These [[ 	]] preclude a useful comparison based on range because
the range does not present a gradual curve in pricing, but instead these two
[[ 	]] entries represent a [[ 	]] from the [[ 	]] data
such that they do not provide a meaningful reference point for our analysis.
BPI Memo at 2 (first citing Customs Data Memo and then citing Certain Frozen Fish Fillets
From the Socialist Rep. of Vietnam, 74 Fed. Reg. at 11,349) (footnote omitted).
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fallen within the range of other POR entries, the presence of two aberrant entries 19 made by other
sellers during the POR resulted in the range method being less useful in this case than comparing
averages. See Customs Data Table supra note 11. Commerce stated that it “has previously
looked at the range of entries when there is a gradual curve in pricing or where there were
entries with similar quantities and prices, not merely where the quantity and price of the sales
under review exist within the range of [Customs] data,” and that “[n]o such pattern exists here.”
See Final I&D Memo at 8 (footnotes omitted; emphasis added). Accordingly, Commerce
declined to use the range method.
Before the court, Sunbeauty argues that Commerce’s use of the average method, instead
of the range method, is unsupported by substantial evidence. To make this argument, Sunbeauty
compares the average unit values and quantities calculated for Sunbeauty’s POR entries to those
for the entries in the Customs dataset, including the aberrant entries. Based on the results of this
comparison, plaintiff concludes that “the average methodology cannot correctly determine
whether any entries are bona fide.” Pl.’s Br. 12 (emphasis added). Plaintiff contends this is so
because the aberrant entries represent a “significant portion” of the Customs data. 20 Pl.’s Br. 14.
19 	The aberrant entries were [[
]].
20 	Sunbeauty argues:
By applying the [average] methodology and following Commerce’s logic, [[
]] of the [[ 	]] entries . . . are found not bona fide while in fact they are.
For instance, . . . entry [[ 	]] . . . has a unit value [[ 	]] than the
weight[ed]-average . . . and its quantity is [[ 	]] than the average
quantity. Similarly, . . . entry [[ 	]] . . . has a unit value [[ 	]] than the
weighted-average and its quantity is [[ 	]] than average. In other
words, the average methodology cannot correctly determine whether any entries
(footnote continued . . .)
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Sunbeauty makes this argument even though the volume of the entries it claims make up a
“significant portion” of the Customs data amount to less than one percent of the total volume of
entries Commerce considered. 21
Additionally, for Sunbeauty, the Customs dataset that yielded the average unit values and
quantities was small, and therefore, unrepresentative of Sunbeauty’s high price, low quantity
entries during the POR. See Pl.’s Reply Br. 6 (“The risks or limitations of applying [an average]
methodology . . . are [that] certain [high quantity] entries . . . may have more influence in a small
[dataset] than other [low quantity] entries . . . . Thus, the average number no long[er] represents
the entire data group but only the [high quantity] entries . . . .”).
Rather than the average method, Sunbeauty contends that Commerce should have used
the range method, insisting that it is the Department’s “long standing practice[]” to do so. See
Pl.’s Br. 16. To make its case, Sunbeauty points to previous administrative proceedings in which
Commerce found that using the range method was appropriate—that is, where the record
demonstrates a gradual curve in sales prices. See Pl.’s Br. 14-16 (citing various administrative
decisions 	and 	confidential 	case-specific 	memoranda 	regarding 	Commerce’s 	bona 	fides
determinations); Pl.’s Reply Br. 14. Indeed, Sunbeauty contends that, contrary to Commerce’s
finding, a gradual curve in pricing exists here. See Pl.’s Br. 13. That is, based on its calculations,
Sunbeauty maintains that “there is a strong linear relationship between price and quantity
are bona fide. Thus, it is not a correct or appropriate approach to compare quantity
and value in this case.
Pl.’s Br. 12-13; see Customs Data supra note 11.
21 	The total quantity of aberrant sales was [[ 	]] kilograms, less than one percent of
[[ 	]] kilograms, the total volume of entries of merchandise entered under HTSUS
subheading 0409. See supra note 11.
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Court No. 17-00089 	Page 16
because the regression coefficient is . . . very close to 1,” and therefore that “[s]uch evidence
suggests that . . . a gradual curve exists in pricing for the [Customs] data and guarantees a useful
comparison based on range.” Pl.’s Br. 13.
In response to plaintiff’s arguments, the Government counters that whereas “Sunbeauty
cites to no case, practice, or legal standard that would require Commerce not to rely upon an
average comparison, or to evaluate the average comparisons of other entries,” this Court has
upheld the comparison of a new shipper’s prices with the weighted-average unit value “where
such a comparison is useful.” Def.’s Br. 20 (citing Jinxiang Chengda Imp. & Exp. Co. v. United
States, 37 CIT __, __, Slip Op. 13-40 at 9-10 (Mar. 25, 2013); Zhengzhou Huachao Indus. Co. v.
United States, 37 CIT __, __, Slip Op. 13-61 at 18-19 (May 14, 2013)).
As for Sunbeauty’s argument that “a gradual curve exists in pricing for the Customs data,
such that a range comparison would be useful,” the Government asserts that “[t]his is incorrect.”
Def.’s Br. 20. For the Government, Commerce correctly found that “the range does not represent
a gradual curve in pricing, but instead . . . two [aberrant] entries represent a [[ 	]]
from the [[ 	]] data such that they do not provide a meaningful reference point for
[Commerce’s] analysis.” Def.’s Br. 21. In other words, Commerce insists that Sunbeauty’s prices
do not show a gradual curve but rather a sharp break from other prices during the POR.
Commerce’s decision to analyze Sunbeauty’s sales using average unit values and
quantities is supported by substantial evidence on the record. The thrust of Sunbeauty’s argument
against the use of the average method is that when the Department compares the price and
quantity of imports using averages, the high volume, low price entries overwhelm the low
volume, high price entries. This observation is both true and demonstrative of the validity of
Commerce’s choice of method.
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Court No. 17-00089 	Page 17
Neither party disputes that the decision to compare price and quantity data by means of
the average method or the range method depends on the specific facts of each case. See Hebei
New Donghua Amino Acid Co. v. United States, 29 CIT 603, 611 n.5, 374 F. Supp. 2d 1333,
1340 n.5 (2005) (“[W]hile some bona fides issues may share commonalities across various
Department cases, each one is company-specific and may vary with the facts surrounding each
sale.” (internal quotation marks and citation omitted)). In past cases, the Department has used the
range method where the record shows that a gradual curve in pricing exists. For example, in
Frozen Fish Fillets, Commerce compared the price and quantity of a new shipper’s sale to the
averages of Customs data, and observed that the new shipper’s price “[did] not appear to be an
outlier when compared to other prices evidenced in the [Customs] data.” Certain Frozen Fish
Fillets From the Socialist Rep. of Vietnam, 74 Fed. Reg. at 11,349, and accompanying Issues and
Decision Mem., Cmt. 8. There, Commerce noted “[s]pecifically, when all the entries are grouped
by manufacturer, [the new shipper’s] price is not so different from the prices right below it. In
other words, the [Customs] data shows a gradual curve of prices, not a sharp curve separating
[the new shipper’s] price from the other prices from [Customs].” Id. (noting same with respect to
quantity) (emphasis added). Unlike in Frozen Fish Fillets, here Commerce found that a gradual
curve did not exist among the prices on the record.
Commerce is right. Indeed, even the most casual glance at the data used by Commerce
reveals that the subject sales cited by Sunbeauty represent not a gradual curve but a cliff. 22 That
is, the volume of the sales is so tiny and their price so high, that they are clearly the kind of
22 	Commerce reasonably found that the average unit values on the record show a
[[ 	]] between the average unit value of the aberrant entries, [[ 	]],
and the [[ 	]] average unit value [[ 	]]. See BPI Memo at 2.
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Court No. 17-00089 	Page 18
outliers not found in Frozen Fish Fillets. See Business Proprietary Information Mem. for
Sunbeauty (Mar. 27, 2017), C.R. 73, ECF No. 38 at tab 3 (“BPI Memo”) at 6-7.
Moreover, using the average method as a means of comparison was reasonable based on
the record. This Court has sustained Commerce’s use of average unit values derived from
Customs data as a “useful tool for comparison because it provides a fair representation of prices
set by the market.” Jinxiang Chengda, 37 CIT at __, Slip Op. 13-40 at 9; see also U.S. Steel Grp.
v. United States, 96 F.3d 1352, 1363 (Fed. Cir. 1996) (“Computing an average . . . permits
compression of large quantities of data into a single representative figure capable of easy
comprehension and assimilation.”). Here, Commerce compared the average unit value for
Sunbeauty’s entries, [[ 	]], to the average unit value for imports under the HTSUS
subheading that Commerce found most specifically described Sunbeauty’s honey, [[ 	]],
as well as to the weighted-average unit value for imports under the appropriate broader HTSUS
subheading, i.e., 0409, [[ 	]], and concluded that the price of Sunbeauty’s POR sales
was unusually high. The Department performed the same procedure using the quantity of honey
imports and found that Sunbeauty’s import quantity was unusually low. See Final I&D Memo
at 9.
By weight-averaging the value and quantity of the entries under the broader HTSUS 0409
subheading, including the aberrant entries, Commerce could see the differences in value and
quantity among the entries in the Customs dataset, thereby providing a fair representation of
prices and quantities normally present in the market. Sunbeauty complains that weight-averaging
causes the high volume, low price sales to overwhelm the low volume, high price sales; and so
they do. Where, as here, the low volume, high price sales are so clearly “outliers,” see Issues and
Dec. Mem., Cmt. 8, accompanying Certain Frozen Fish Fillets From the Socialist Rep. of
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Court No. 17-00089 	Page 19
Vietnam, 74 Fed. Reg. at 11,349, weight-averaging serves to provide a valid point of comparison
for judging if the price of Sunbeauty’s entries was “typical of those” it will charge “after the
completion of the review,” 19 U.S.C. § 1675(a)(2)(B)(iv)(VII), “because [weight-averaging]
provides a fair representation of prices set by the market.” Jinxiang Chengda, 37 CIT at __, Slip
Op. 13-40 at 9.
Using the entries of small quantities with high prices as a part of a range would serve to
distort the results by giving them more significance than they warrant. Using an average, on the
other hand, results in the significance of the entries being reduced. This reduction is what
plaintiff objects to, but it places these entries in their proper perspective.
Based on the record here, Commerce’s use of averages as a means of comparing the price
and quantity of Sunbeauty’s imports is sustained.
II. 	Substantial Evidence Supports Commerce’s Comparison of Sunbeauty’s Sales to
Honey Entered Under the HTSUS Subheading Selected by Commerce
Sunbeauty objects to the HTSUS subheading used by Commerce, in part, to find
comparable entries of honey during the POR for purposes of analyzing price and quantity. 23
Sunbeauty argues that Commerce should not have used a subheading for honey that would enter
the wholesale market. Plaintiff makes this argument even though it entered its honey under a
subheading for honey to be sold at wholesale. As has been noted, in reaching its price and
quantity findings, Commerce compared Sunbeauty’s entries with Customs data for (1) imports
under the HTSUS subheading that Commerce found most specifically described Sunbeauty’s
23 	Commerce used HTSUS subheading [[
]] 	in 	its 	price
and quantity comparisons. Bona Fides Memo at 4.
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Court No. 17-00089 	Page 20
honey, and (2) all of the entries using the subheadings found under HTSUS subheading 0409 that
were made during the POR.
In the Final Rescission Determination, Commerce compared the average unit values and
average 	quantities 	of 	Sunbeauty’s 	sales 	with 	Customs 	data 	for 	entries 	under 	the
HTSUS subheading that it found most specifically described Sunbeauty’s honey based on the
record. Bona Fides Memo at 4; BPI Memo at 1. For Commerce, its preferred subheading
accurately described Sunbeauty’s honey, both in terms of its color and whether it was bound for
the wholesale market.
As to color, Commerce asserted that while Sunbeauty’s importer had entered the subject
honey as [[ 	]] honey, pursuant to HTSUS subheading [[
]], 	in 	questionnaire
responses, Sunbeauty, its importer, and the honey producer, Xiping Haina Trade Co., Ltd.
(“Xiping”) claimed that the color was not [[ 	]] but [[ 	]]. See BPI Memo
at 1 (emphasis added; footnotes omitted). Based on Sunbeauty’s response, Commerce concluded
that with respect to the color of Sunbeauty’s 	honey, “record evidence show[ed] 	that a
comparison against entries made under HTSUS [[
]] would be more specific
to . . . Sunbeauty’s sales.” BPI Memo at 1 (emphasis added). Commerce’s finding with respect to
the color of the imported honey is uncontested.
Additionally, Commerce determined that the record showed Sunbeauty’s honey was
bound for the wholesale market. Commerce stated, by way of explanation:
[Sunbeauty’s importer] entered the sales as [[ 	]] on . . . its entry
summaries. [Sunbeauty’s importer] did not submit images of the packages or any
labels affixed to the packages of merchandise subject to this review in response to
the Department’s questionnaire. Additionally, [Sunbeauty’s importer] [[
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Court No. 17-00089 	Page 21
]] of the merchandise, but rather the ultimate U.S. customers
[[ 	]], and [Sunbeauty’s importer] is
not aware whether the ultimate U.S. customer later sold the honey as retail
merchandise. Nor is there other record information supporting the contention that
Sunbeauty’s sales were packaged [[ 	]]. As such, the Department has
no evidence that the final customer sold the honey as retail merchandise in its
original packaging. Furthermore, Sunbeauty’s sales each consisted of 272 2-liter
bottles individually packed with [[ 	]] of honey each. The amount of
honey Sunbeauty packed per bottle is at least [[ 	]] larger than a three-pound
jug of honey, the largest example of retail honey Sunbeauty placed on the record.
BPI Memo at 1-2 (footnotes omitted). As noted earlier, a two-liter bottle of honey would contain
in excess of six pounds of honey. In light of the foregoing, Commerce concluded that the record
evidence did not show that Sunbeauty’s honey was sold at retail in its original packaging. 24 See
Bona Fides Memo at 4.
Before the court, Sunbeauty insists that the record shows its honey was not bound for the
wholesale market and that, therefore, comparing its sales to imports under HTSUS subheading
[[ 	]] was improper. Instead, for Sunbeauty, “Commerce should compare
Sunbeauty’s [POR] sales either with Sunbeauty’s sales after [the] POR or with U.S. entries from
the . . . broader [heading,] HTSUS 0409, Natural Honey, during the POR.” Pl.’s Br. 11. As
noted, one of Commerce’s two comparisons was of Sunbeauty’s entries to entries made under
the subheadings of HTSUS 0409. In other words, Commerce did, in fact, conduct the comparison
24 	Commerce stated:
[T]he Department continues to find that a comparison of Sunbeauty’s sales to
entries of honey [[ 	]] is the most appropriate because
the record lacks any evidence showing the final customer sold the honey as retail
merchandise in its original packaging, and the individual size [i.e., in excess of six
pounds] of Sunbeauty’s honey is more similar to honey [[
]] in comparison to other retail honey on the record.
BPI Memo at 2.
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Court No. 17-00089 	Page 22
urged by Sunbeauty. Thus, the court understands Sunbeauty’s claim to be limited to the other
comparison, i.e., the comparison of Sunbeauty’s sales to imports entered under the HTSUS
subheading selected by Commerce, [[ 	]].
In support of its claim, Sunbeauty argues that there is record evidence that the final
customer did not sell Sunbeauty’s honey at wholesale. For Sunbeauty, “[t]he [[ 	]] on
the purchase order of Sunbeauty’s unaffiliated U.S. customer is a clear indicator that the subject
merchandise is used [[ 	]].” Pl.’s Br. 10.
Next, Sunbeauty takes issue with particular factual findings based on the record evidence,
arguing that the record does not support Commerce’s finding that Sunbeauty’s importer’s
customers [[ 	]]. Specifically, Sunbeauty
points to invoices from a freight carrier and certain customs entry forms, the dates on which
show, according to plaintiff, that Sunbeauty’s importer [[ 	]] of the honey “for a
period of time before [downstream] sales.” Pl.’s Br. 10. Plaintiff also points to other record
evidence (i.e., “purchase orders or order confirmation[s] from [the importer’s] customers”),
arguing that the evidence “suggest[s] that those customers are [[ 	]] rather than
[[ 	]].” Pl.’s Br. 10-11.
Finally, Sunbeauty submits that the quantity of its honey exports supports a finding that
its honey was sold at retail in its original packaging. In particular, Sunbeauty asserts that
Commerce failed to adequately consider “that the smallest example of honey [[
]] on record, [[ 	]], is approximately [[ 	]] larger than
Sunbeauty’s package.” Pl.’s Br. 11 (footnote omitted). For Sunbeauty, “[b]y simply comparing
[[ 	]] and [[ 	]], normal and reasonable people would agree that Sunbeauty’s
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Court No. 17-00089 	Page 23
package is much more close to the retail package on record, and that Sunbeauty’s honey [was]
[[ 	]].” Pl.’s Br. 11.
As an initial matter, the court notes that there is no dispute that HTSUS subheading
[[ 	]] accurately describes the color of
Sunbeauty’s honey sales during the POR. Indeed, before Commerce, Sunbeauty, its importer,
and its producer presented evidence to show that the honey was [[ 	]] in color.
See BPI Memo at 1. Nor is there any dispute that Sunbeauty’s importer entered the subject honey
as bound for the wholesale market on customs entry forms. See Sunbeauty’s Resp. Importer-
Specific Questionnaire (July 22, 2016), C.R. 46-47 Ex. 7, ECF No. 38 at tab 10 (describing
Sunbeauty’s entries as [[ 	]]).
Sunbeauty insists, nonetheless, that its honey was not bound for wholesale. The record
evidence Sunbeauty cites in support of its argument, however, does not demonstrate that this is
the case. For example, plaintiff cites to no record evidence explaining just how a [[ 	]]
on a purchase order supports its claim that the goods were packaged for individual sale, instead
of for sale to, e.g., a [[ 	]]. That is, plaintiff has not buttressed its claim
with evidence. Instead, plaintiff has relied on “common sense” as support for its argument. See
Sunbeauty Case Br., C.R. 71 at 6, ECF 38 at tab 8 (“As common sense, [[ 	]] is
designed for [[ 	]] and widely used in [[ 	]].”). Absent actual evidence that
the [[ 	]] indicates that its products were packaged for retail sale this claim is
unconvincing.
Next, plaintiff cites 	freight invoices on the record that indicate that the destination of
the honey was [[ 	]] county. While this is the same county where Sunbeauty’s
importer’s customers were located, the 	invoices do not mention the customers’ names, or
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Court No. 17-00089 	Page 24
contain any indication of whether or not those customers sold the honey at retail. Likewise,
though plaintiff asserts that the “ purchase orders or order confirmation[s] 	from [the
importer’s] customers . . . suggest that those customers are [[ 	]] rather than
[[ 	]],” plaintiff fails to explain this assertion. Pl.’s Br.
10-11. Rather, plaintiff maintains that it is “common sense that [[ 	]] would sell
merchandise to [[ 	]] in its original packaging rather than repack or process
for other purposes.” Pl.’s Br. 11. However self-evident this proposition may be to Sunbeauty,
Commerce may not rest its determinations on a respondent’s “common sense” in place of
evidence.
The record is clear, however, that Sunbeauty’s importer designated the subject honey as
headed for the wholesale market in customs entry forms. See Sunbeauty’s Resp. Importer-
Specific Questionnaire (July 22, 2016), C.R. 46-47 Ex. 7, ECF No. 38 at tab 10 (describing
Sunbeauty’s entries as [[ 	]]). This designation
comports with other record evidence regarding Sunbeauty’s sales—specifically, each of the 272
two-liter bottles weighing in excess of six pounds. This per-bottle amount was much larger than
a three-pound jug of honey, i.e., “the largest example of retail honey [that] Sunbeauty placed on
the record.” BPI Memo at 2.
Sunbeauty attempts to distinguish its honey sales from honey bound for the wholesale
market by arguing that “that the smallest example of honey [[ 	]] on
record, [[ 	]], is approximately [[ 	]] larger than Sunbeauty’s
package.” Pl.’s Br. 11 (footnote omitted). Applying Sunbeauty’s common sense analysis,
however, compels the conclusion that merely because a 300-kilogram (661-pound) drum of
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Court No. 17-00089 	Page 25
honey was unlikely to end up on a grocer’s shelf, a jar packed with six pounds of honey would
necessarily be headed for the local supermarket.
The 	record 	here 	supports 	the 	Department’s 	conclusion 	that 	HTSUS 	subheading
[[ 	]] specifically describes Sunbeauty’s honey both in terms of it color and that it
was bound for the wholesale market. See BPI Memo at 2 (finding that “a comparison of
Sunbeauty’s sales to entries of honey [[ 	]] is the most appropriate
because the record lacks any evidence showing the final customer sold the honey as retail
merchandise in its original packaging, and the individual size of Sunbeauty’s honey is more
similar to honey [[ 	]] in comparison to other retail honey on the
record.”). Accordingly, Commerce’s decision, with respect to one of its two comparisons, to
compare the price and quantity of Sunbeauty’s honey entries with the price and quantity of
honey imported under HTSUS subheading [[ 	]], is sustained.
III. 	Substantial 	Evidence 	Supports 	Commerce’s 	Finding 	that 	Reported 	Expenses
Weighed in Favor of a Non-Bona Fides Determination
Among the statutory factors that Commerce must consider in reaching its bona fides
determination are “the expenses arising from such sales.” 19 U.S.C. § 1675(a)(2)(B)(iv)(IV). The
significance of reported expenses to Commerce’s determination depends on the facts of a
particular case, but the nature or amount of the expenses can be relevant to Commerce’s
determination. See, e.g., Windmill Int’l Pte., Ltd. v. United States, 26 CIT 221, 231, 193 F. Supp.
2d 1303, 1313 (2002) (“Commerce’s reasons for determining that Windmill’s sale was non-bona
fide included . . . the extraordinary high air freight cost and other expenses incurred by the
United States purchaser that were significantly greater than the total value of the sale . . . .”)
(internal quotation marks and citation omitted).
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Court No. 17-00089 	Page 26
Sunbeauty reported paying a “lump sum fee” to its logistics vendor for customs clearance
services. Commerce issued a supplemental questionnaire designed to elicit more information and
supporting documentation about the services that Sunbeauty received and paid for. Sunbeauty’s
response, however, did not clarify what services it had paid for; rather it raised more questions.
As discussed in the Final I&D Memo:
According to Sunbeauty, [its] unaffiliated logistics company invoiced Sunbeauty
for a lump sum fee associated with each export, and Sunbeauty initially cited this
fee as a service charge related to the “export procedure” and the “service provided
(time consumed to process paperwork).” When asked to detail all of the services
included in the lump sum fee, Sunbeauty only stated that it includes a “custom
clearance fee and drayage fee.” Sunbeauty also stated that the unaffiliated
logistics company’s cost structure and general market condition affect its quote
for the lump sum fee, but failed to provide any documentation from the
unaffiliated logistics company outlining its cost structure or the general market
condition at the time such that it would have affected its quote.
Final I&D Memo at 9 (footnotes omitted). Put another way, Sunbeauty simply could not, or
would not, say what it was paying for. With respect to the “lump sum fee,” Commerce found that
“Sunbeauty failed to explain the services rendered in association with this export expense,” and
its “inconsistent responses regarding the lump sum fee continue[d] to contribute to [its] finding
that Sunbeauty’s sales [were] non-bona fide, because it is unclear what the nature of this lump
sum fee is.” Final I&D Memo at 10.
Plaintiff challenges Commerce’s interpretation of Sunbeauty’s questionnaire responses as
“inconsistent.” Specifically, plaintiff maintains that
Commerce incorrectly concluded that Sunbeauty’s statements with regard to [the]
lump sum fee are inconsistent in its Bona Fide Memo because Commerce failed
to recognize that the second response is from the Sunbeauty’s unaffiliated
logistic[s] vendor. Although Commerce may overlook the phrase of “{a}ccording
to [the vendor]” in the beginning of Sunbeauty’s response, Commerce, as the
designer of questionnaire, should be aware that Sunbeauty would not be able to
answer any questions related to the cost structure or pricing model of Sunbeauty’s
unaffiliated logistic[s] vendor. Commerce should have a general expectation that
Sunbeauty’s unaffiliated logistic[s] vendor would be the better respondent to
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Court No. 17-00089 	Page 27
answer these questions and probably provide a different statement due to [the]
different 	perspective 	and 	understanding 	of 	logistics 	business. 	Thus, 	it 	is
completely normal and reasonable for Sunbeauty to characterize the lump sum fee
as a service charge while its unaffiliated logistic[s] vendor detailed such service
charge into custom clearance fee and drayage fee which are completely normal
and regular export expenses. Like the two sides of a coin, different angles
(perspectives) 	result 	in 	different 	appearances 	(statements), 	but 	different
appearances (statements) still suggest the same coin (fact).
Pl.’s Br. 16-17. With respect to Sunbeauty’s alleged failure to supply supporting information
regarding its vendor’s cost structure or market conditions that may have affected the amount the
vendor charged Sunbeauty for its services, plaintiff argues that (1) Commerce never requested
such documentation, and (2) the cost structure is a “business secret.” Pl.’s Br. 17. Plaintiff
maintains that without an explicit request for this information from Commerce, “it would be
impossible or extremely difficult for Sunbeauty to obtain such documents from its unaffiliated
logistic[s] vendor.” Pl.’s Br. 17.
Plaintiff’s characterization of its own statements in its original and supplemental
responses as “different,” rather than “inconsistent,” Pl.’s Br. 16, misses the mark. By its
questionnaires, Commerce sought information from Sunbeauty regarding, among other things,
expenses that it incurred in connection with its POR sales. These expenses matter because they
are one of the statutory factors relevant to Commerce’s determination of whether those sales are
bona fide. See 19 U.S.C. § 1675(a)(2)(B)(iv)(IV). Sunbeauty reported that it incurred a “lump
sum fee,” among its expenses. See Sunbeauty’s Resp. Suppl. Sec. A Quest. (June 7, 2016) at 11,
C.R. 35, ECF No. 38 at tab 21. Subsequently, Commerce asked Sunbeauty to “provide a more
complete and detailed description of this [lump sum] expense,” and Sunbeauty responded that it
“mainly refer[red] to the charge for the service provided for export customs declaration,” and
that the “‘Lump Sum Fee’ is based on the service provided.” Sunbeauty’s Resp. Suppl. Sec. A, C
Quest. (July 21, 2016) at 3, C.R. 38-42, ECF No. 38 at tab 16. When Commerce then asked that
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Court No. 17-00089 	Page 28
Sunbeauty “[d]etail all of the services” the vendor provided for the lump sum fee, Sunbeauty’s
entire response was, “According to [the vendor], its ‘Lump Sum Fee’ includes custom clearance
fee and drayage fee.” See ECF No. 38 at tab 15 p. 3.
It can hardly be said that Sunbeauty’s response detailed all the services provided by the
vendor in exchange for the lump sum fee, or clarified which portion of the lump sum constituted
payment for those services. Moreover, contrary to plaintiff’s argument, Commerce expressly
directed Sunbeauty to “[i]nclude documentation to support [its] response,” which Sunbeauty
failed to do. Thus, it was reasonable for Commerce to conclude that Sunbeauty’s “different”
statements were inconsistent, and failed to clarify the nature of the services covered by the lump
sum fee. Indeed, much of Sunbeauty’s questionnaire response amounts to a claim that the
company was willing to pay a fee without any clear idea as to what it was for. It is little wonder
that the Department found this explanation lacking.
Plaintiff’s claim that it could not provide its vendor’s cost structure and the general
market conditions, that reportedly affected its vendor’s quote for freight and the “lump sum fee,”
because 	they 	were 	“business 	secrets,” 	does 	not 	excuse 	Sunbeauty’s 	failure 	to 	answer
Commerce’s questions as to what services the company received for its money. See Final I&D
Memo at 9. Under Commerce’s regulations, Sunbeauty could have supplied a public summary of
the requested information to Commerce, see 19 C.F.R. § 351.304(c)(1), or included the needed
explanation in its lengthy claim of confidential business proprietary information in the record it
made, that is now before the court.
Finally, it is the burden of interested parties to a proceeding to create an adequate record.
See Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1337-38 (Fed. Cir. 2016) (citing
QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011)). Plaintiff may not deflect
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Court No. 17-00089 	Page 29
that burden by asserting that “Commerce should have a general expectation that Sunbeauty’s
unaffiliated logistic[s] vendor would be the better respondent to answer these questions . . . .”
Pl.’s Br. 16. Accordingly, Commerce’s finding that reported expenses weighed in favor of a non-
bona fides determination is sustained.
IV. 	Substantial Evidence Supports Commerce’s Determination that Additional Factors
Were Relevant to its Bona Fides Analysis
The remainder of plaintiff’s arguments ask the court to find unreasonable Commerce’s
determination that certain deficiencies and discrepancies in Sunbeauty’s questionnaire responses,
were relevant to its determination that Sunbeauty’s sales were not bona fide.
At the outset it must be noted that Sunbeauty does not dispute that it failed to provide
information that Commerce asked for regarding its importer’s purchases from other suppliers.
Nor does Sunbeauty argue that the statute prohibits Commerce from considering deficiencies and
discrepancies in questionnaire responses as a factor in its bona fides analysis. Rather, plaintiff
appears to contest the Department’s decision to attach relevance to these deficiencies and
discrepancies when making its bona fides determination. Plaintiff makes several arguments, none
of which persuade the court that the Department committed any error here.
First, Sunbeauty failed to provide its importer’s purchase orders, invoices, and packing
lists from third party suppliers, as Commerce requested. The Department sought this information
from Sunbeauty’s importer “to determine whether the price and quantity of the sales subject to
this . . . review are not atypical and whether the subject sales provide a reasonable basis to
calculate an [antidumping] margin,” noting that “this information was not within any of the other
record evidence cited by Sunbeauty.” Final I&D Memo at 11.
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Plaintiff contends that this documentation was a “business secret” and unrelated to the
POR sales under review, and, in any event, the record contained other information that could
“cure” the deficiency in Sunbeauty’s response. See Pl.’s Br. 18-20. This “no harm no foul”
argument is unconvincing. Commerce designs its questionnaires to elicit information that it has
determined it requires to perform its bona fides analysis, and Sunbeauty had the burden to
respond with the requested information to create an adequate record. See Nan Ya Plastics Corp.,
810 F.3d at 1337-38. To the extent that information responsive to Commerce’s request was
business proprietary, Sunbeauty could have supplied a public summary or included it as
confidential business proprietary information. See 19 C.F.R. § 351.304(c)(1).
Second, plaintiff contends that Commerce unreasonably failed to accept copies of
invoices and cleared checks provided by Sunbeauty’s importer’s customs broker, as a substitute
for the importer’s accounting ledgers reflecting the payment of customs duties. For Commerce,
“[t]he Department’s ability to evaluate whether full payment of all expenses surrounding the sale
were made, including customs duties, is additionally necessary to examine whether the sale is
atypical.” Final I&D Memo at 11. Plaintiff maintains that Commerce’s request for “accounting
records” did not specify precisely which type of record the Department required, and in any
event, the information Sunbeauty provided (“source documents”) was “better than the secondary
source documents such as general [ledgers].” Pl.’s Br. 19. This claim, however, ignores the
Importer-Specific Supplemental Questionnaire, where Commerce asked that Sunbeauty “submit
copies 	of 	[its 	importer’s] 	accounting 	records 	that 	demonstrate 	where 	the 	payments 	of
[[ 	]] to [the customs broker] and [[ 	]] to [Customs] are recorded.” Importer-
Specific Suppl. Quest. (July 12, 2016) at 8, C.R. 37, ECF No. 38 at tab 9 (emphasis added).
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Copies of cleared checks and invoices do not provide the information requested. That is, they do
not show where the identified payments were recorded in the importer’s books.
Third, plaintiff contends that the information Commerce requested relating to the
payment term between Sunbeauty and its importer, e.g., documents regarding retention, testing,
and release of subject merchandise by U.S. authorities, was “irrelevant.” Pl.’s Br. 20. For
plaintiff, Commerce’s request for this information resulted from the Department’s “fail[ure] to
fully understand the payment term agreed between Sunbeauty and [its importer].” 25 Pl.’s Br.
19-20. Commerce stated, however, that “[t]he Department did not misunderstand Sunbeauty’s
terms of sale when seeking this information, but, rather, sought this information to clarify the
record and inform its understanding of the conditions of payment.” Final I&D Memo at 12.
Plaintiff, nonetheless, maintains that its failure to provide the information was harmless to
Commerce’s analysis, and the information it did provide, i.e., emails between the importer and
the broker, sufficed instead. Again, this argument is unconvincing. As noted above, Commerce
designs its questionnaires to elicit information that it has determined it requires to perform its
bona fides analysis, and Sunbeauty had the burden to respond with the requested information to
create an adequate record. See Nan Ya Plastics Corp., 810 F.3d at 1337-38.
Next, plaintiff argues that “Commerce’s determination that the failure of Sunbeauty’s
[importer] to provide documentation undermined the bona fide nature of Sunbeauty’s sales is
25 	The payment term was [[ 	]]. Pl.’s Br. 20.
Plaintiff apparently attributes Commerce’s alleged “misunderstanding” of this term to the term’s
favorability to the buyer “because [[ 	]] . . . .” Pl.’s Br.
20. Plaintiff goes on to explain that this term is “a cruel example of . . . how an experienced
importer took advantage of an oversea[s] inexperience[d] exporter through a well-designed but
unfair term[] of trade.” Pl.’s Br. 20 (characterizing the payment term as a “business trick” and
“unethical”).
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akin to making an adverse inference against a cooperating party due to a non-cooperating,
non-party’s failures.” Pl.’s Br. 20. Plaintiff contends that, unlike cases in which this Court upheld
the use of an adverse inference against a cooperating party, here, “Sunbeauty . . . obtain[ed]
certain alternative documents from its [importer],” and “Sunbeauty has fully cooperated and has
provided reliable documentation to allow Commerce to achieve its purpose.” Pl.’s Br. 21.
This argument is unavailing. As an initial matter, Commerce did not draw an adverse
inference 	against 	Sunbeauty, 	pursuant 	to 	19 	U.S.C. 	§ 	1677e, 	in 	the 	Final 	Rescission
Determination. Rather, Commerce considered the discrepancies and deficiencies in Sunbeauty’s
responses as a relevant factor that tended to support its finding that Sunbeauty’s sales were not
bona 	fide, 	as 	it 	is 	required 	to 	do 	under 	the 	bona 	fides 	statute. 	See 	19 	U.S.C.
§ 1675(a)(2)(B)(iv)(VII) (Commerce “shall consider,” inter alia, “any other factor [Commerce]
determines to be relevant as to whether such sales are, or are not, likely to be typical of those the
exporter or producer will make after completion of the review”). While standing alone these
discrepancies and deficiencies may not suffice as substantial evidence that Sunbeauty’s sales
were not bona fide, Commerce properly considered them in light of other evidence on the record
and found that they weighed in favor of a determination that the sales were not bona fide. See
Zhengzhou, 37 CIT at __, Slip Op. 13-61 at 42 (“The court finds that the inconsistencies in
Huachao’s U.S. customer’s responses to Commerce’s questionnaires, and its failure to provide
all of the information the Department requested, lends additional support to Commerce’s finding
of a non-bona fide sale under the ‘totality of the circumstances’ test.”).
Finally, to the extent Commerce considered Sunbeauty’s self-described “negligence” in
preparing invoices as a factor bearing on the bona fide nature of its sales, the court finds no error.
When Commerce pointed out a discrepancy between the production date, [[ 	]]
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Court No. 17-00089 	Page 33
on an invoice included in Sunbeauty’s request for review, and information on the record stating
that its producer, Xiping, had [[ 	]] in that month, Sunbeauty stated that the
error was due to its own “negligence when preparing the invoice,” specifically: “For the
convenience of its own work, [Sunbeauty] did not physically check the merchandise or
communicate with [Xiping].” Sunbeauty’s Resp. Suppl. Sec. D Quest. (Sept. 1, 2016) at 2, C.R.
53, ECF 38 at tab 32. Although Sunbeauty downplays the significance of the discrepancy as a
“clerical error” that should not bear on the reliability of the information it supplied generally,
Commerce did not commit any error by considering Sunbeauty’s admission of negligence,
particularly since plaintiff failed to bring the discrepancy in the documents to Commerce’s
attention. See Final I&D Memo at 12 (“Sunbeauty . . . submitted these documents without
initially informing the 	Department 	that 	these 	discrepancies 	existed 	because 	‘{f}or 	{the}
convenience of its own work, it did not physically check the merchandise or communicate with
{its producer}.’”). Moreover, it was not unreasonable for Commerce to conclude that the
discrepancy 	between 	the 	invoice 	bearing 	the 	erroneous 	production 	date 	and 	Xiping’s
production 	records may have had downstream consequences since, as Commerce noted and
Sunbeauty itself pointed out, the [[ 	]] would bear on “the shelf life of the honey
and its ultimate sale,” which means that “the importer and, ultimately, the final U.S. customer
made purchasing decisions with respect to the sale of Sunbeauty’s honey without complete and
accurate information.” Final I&D Memo at 12-13. Accordingly, Commerce’s consideration of
the discrepancies and deficiencies in Sunbeauty’s questionnaire responses as a factor in its bona
fides analysis is sustained.
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CONCLUSION
Commerce’s 	conclusion 	that Sunbeauty’s 	sales were not bona 	fide, 	based 	on an
examination of the totality of the circumstances, is supported by the record. Therefore,
Commerce’s Final Rescission Determination is sustained. Judgment will be entered accordingly.
/s/ Richard K. Eaton
Richard K. Eaton, Judge
Dated: September 6, 2018
New York, New York
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