Jilin Forest Industry Jinqiao Flooring Group Co., Ltd. v. United States

Slip Op. 21 – 
UNITED STATES COURT OF INTERNATIONAL TRADE
__________________________________________
:
JILIN FOREST INDUSTRY JINQIAO 	:
FLOORING GROUP CO., LTD., 	:
:
Plaintiff, 	:
: 	Before: Richard K. Eaton, Judge
v. 	:
: 	Court No. 18-00191
UNITED STATES, 	:
:
Defendant. 	:
__________________________________________:
OPINION and ORDER
[Remanding U.S. Department of Commerce’s final results of fifth administrative review of
multilayered wood flooring from the People’s Republic of China.]
Ronald M. Wisla, Fox Rothschild LLP, of Washington, DC, argued for Plaintiff. With him
on the brief were Lizbeth R. Levinson and Brittney R. Powell.
Sonia M. Orfield, Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were
Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan,
Assistant Director. Of Counsel on the brief was Rachel A. Bogdan, Attorney, Office of the Chief
Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington,
DC.
Eaton, Judge: Plaintiff, Jilin Forest Industry Jinqiao Flooring Group Co., Ltd. (“Jilin”), is
a mandatory respondent supplier of multilayered wood flooring, located in the People’s Republic
of China (“China”). 	Jilin challenges the final results of the fifth administrative review of the
antidumping duty order on that flooring. 	See Multilayered Wood Flooring From the People’s
Republic of China, 83 Fed. Reg. 35,461 (Dep’t Commerce July 26, 2018), P.R. 351 (“Final
Results”), and accompanying Issues and Decision Mem. (July 18, 2018), P.R. 340 (“Final IDM”).
'DWHG$SULO
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 1 of 35

Court No. 18-00191 	Page 2
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018) and 28 U.S.C.
§ 1581(c) (2018).
By its motion for judgment on the agency record, Jilin disputes the Final Results in two
respects: (1) that the United States Department of Commerce (“Commerce” or the “Department”)
unlawfully determined that Jilin was not separate from the control of the government of China;
and (2) that Commerce’s failure to calculate an individual rate for it as a fully cooperative
mandatory respondent was contrary to law. See Pl.’s Mem. Supp. Mot. J. Agency R., ECF No.
20-1 (“Pl.’s Br.”); Pl.’s Reply, ECF No. 27; see also Compl. ¶¶ 14-21, ECF No. 9.
Defendant the United States, on behalf of Commerce, urges the court to sustain the Final
Results as supported by substantial evidence and otherwise in accordance with law. See Def.’s
Opp’n Pl.’s Mot. J. Agency R., ECF No. 23 (“Def.’s Br.”).
For the reasons set forth below, Jilin’s motion for judgment on the agency record is
granted, and this case is remanded to the Department for further proceedings consistent with this
opinion.
BACKGROUND
The antidumping duty order on multilayered wood flooring from China dates from
December 8, 2011. See Multilayered Wood Flooring From the People’s Republic of China, 76
Fed. Reg. 76,690 (Dep’t Commerce Dec. 8, 2011), as amended by Multilayered Wood Flooring
From the People’s Republic of China, 77 Fed. Reg. 5,484 (Dep’t Commerce Feb. 3, 2012)
(“Order”). 	On the 2016 anniversary month of the Order, the domestic industry petitioners
Coalition for American Hardwood Parity requested review of the 2015-2016 period. See Pet’rs’
Req. for Admin. Rev. (Dec. 30, 2017), P.R. 14; Antidumping or Countervailing Duty Order,
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 2 of 35

Court No. 18-00191 	Page 3
Finding, or Suspended Investigation; Opportunity To Request Admin. Rev., 81 Fed. Reg. 86,694
(Dep’t Commerce Dec. 1, 2016); see also 19 U.S.C. § 1675(a)(1). 	Commerce subsequently
identified 115 exporters, producers, or importers of the flooring as subjects of the review in its
Initiation of Antidumping & Countervailing Duty Administrative Reviews, 82 Fed. Reg. 10,457
(Dep’t Commerce Feb. 13, 2017), as corrected by Initiation of Antidumping & Countervailing
Duty Administrative Reviews., 82 Fed. Reg. 13,795 (Dep’t Commerce Mar. 15, 2017). 	See
Respondent Selection Mem. (Apr. 7, 2017), P.R. 161 (“RSM”).
In the initiation notices, Commerce stated that China was a nonmarket economy country1
and therefore that it would employ its nonmarket economy policy of applying the rebuttable
presumption that all respondents were subject to state control (the “NME Policy”). See 82 Fed.
Reg. at 13,796. Respondents that could rebut this presumption—by providing evidence of de jure
decentralized control from the state, including “an absence of restrictive stipulations associated
with an individual exporter’s business and export licenses” and also evidence that their “export
1 	A “nonmarket economy country” is “any foreign country that [Commerce]
determines does not operate on market principles of cost or pricing structures, so that sales of
merchandise in such country do not reflect the fair value of the merchandise.” 19 U.S.C.
§ 1677(18)(A). The implication for entities operating subject to a nonmarket economy structure
is that their financial and sales information is unreliable for the purpose of determining the
“normal value” of subject merchandise. See 19 U.S.C. § 1677b(a); see also Shanghai Foreign
Trade Enters. Co. v. United States, 28 CIT 480, 481, 318 F. Supp. 2d 1339, 1341 (2004).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 3 of 35

Court No. 18-00191 	Page 4
activities” 2 (or rather “export functions” 3 ) are not subject de facto to Chinese governmental
control—would be entitled to receive a rate that is separate from the country-wide rate assigned
to all companies or entities that are presumptively considered state-controlled as part of an
amalgamated “NME entity.” See U.S. Dep’t Commerce, Import Administration Policy Bulletin
05.1 (Apr. 5, 2005), https://enforcement.trade.gov/policy/bull05-1.pdf (“Policy Bulletin 05.1”).
Jilin was among seventy-two firms that submitted a request for separate rate status. See
Decision Mem. for the Preliminary Results of Antidumping Duty Admin. Rev.: Multilayered
2 	See, e.g., Guizhou Tyre Co. v. United States, 44 CIT ___, ___, 469 F. Supp. 3d
1338, 1345 (2020) (quoting the Department’s reference to “export activities” in its final
determination); Gerber Food (Yunnan) Co. v. United States, 31 CIT 921, 945, 491 F. Supp. 2d
1326, 1350 (2007) (quoting the Department’s reference to “export activities” in its final
determination). 	This opinion relies on the Department’s original articulation of “export
functions” in the Import Administration Policy Bulletin 05.1. See U.S. Dep’t Commerce, Import
Administration Policy Bulletin 05.1 (Apr. 5, 2005), https://enforcement.trade.gov/policy/bull05-
1.pdf.
3 	Import Administration Policy Bulletin 05.1 states:
Typically, the Department considers four factors in evaluating whether each
respondent is subject to de facto governmental control of its export functions:
1) whether the export prices are set by, or subject to the approval of, a
governmental authority; 2) whether the respondent has authority to negotiate and
sign contracts and other agreements; 3) whether the respondent has autonomy from
the central, provincial and local governments in making decisions regarding the
selection of its management; and 4) whether the respondent retains the proceeds
of its export sales and makes independent decisions regarding disposition of profits
or financing of losses.
U.S. Dep’t Commerce, Import Administration Policy Bulletin 05.1 (Apr. 5, 2005), https://
enforcement.trade.gov/policy/bull05-1.pdf 	(emphasis 	added). 	In 	developing 	these 	factors,
Commerce relied upon neither statute nor regulation. Rather it has cited two of its own prior
decisions, including Notice of Final Determination of Sales at Less Than Fair Value: Silicon
Carbide From the People’s Republic of China, 59 Fed. Reg. 22,585, 22,587 (Dep’t Commerce
May 2, 1994) and Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl
Alcohol From the People’s Republic of China, 60 Fed. Reg. 22,544, 22,545 (Dep’t Commerce
May 8, 1995).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 4 of 35

Court No. 18-00191 	Page 5
Wood Flooring from the People’s Republic of China; 2015-2016 (Jan. 2, 2018), P.R. 308
(“PDM”) at 10. 	Jilin’s separate rate certification stated that it had been granted separate rate
status in the previous administrative review. See Jilin Separate Rate Certification (Mar. 14, 2017),
P.R. 97. Jilin had also received a separate rate (i.e., the “all-others” rate) in the initial investigation
and in each of the four preceding administrative reviews. 	The company reported, as required,
that it was not under the control of the Chinese government de jure nor were its export functions
subject to governmental control de facto, and it provided documentation to support its claim. See
Jilin Separate Rate Certification.
Thereafter, relying on 19 U.S.C. § 1677f-1(c)(2), the Department selected Jilin and
Jiangsu Senmao Bamboo and Wood Industry Co., Ltd. (“Jiangsu”)4 as “mandatory respondents,”
as they accounted for the “largest” volume of subject merchandise. 	See RSM at 7. 	The
Department then sent its usual antidumping questionnaires to Jilin and Jiangsu.
Between May and September 2017, Jilin timely responded to Commerce’s requests for
information in sections A, C, and D of the original questionnaire, which included detailed factor-
of-production calculations. 	Jilin also provided timely responses to four lengthy supplemental
questionnaires detailing its operations and ownership structure, asserting that it operated
independently of the Chinese government, providing all of the other information requested
regarding its operations, and submitting surrogate value information to enable Commerce to
calculate an individual margin based on its factors of production. See Pl.’s Br. 28-29; see also
Jilin Section A Resp. (May 16, 2017), P.R. 202-207. There is no indication on the record that
Commerce ever called into question the accuracy and adequacy of Jilin’s responses to the
4 	Jiangsu is not a party to this action.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 5 of 35

Court No. 18-00191 	Page 6
questionnaires, or that Jilin ever failed to cooperate or provided untimely responses to
Commerce’s requests for information. See Pl.’s Reply 10.
Commerce issued its Preliminary Decision Memorandum and accompanying Preliminary
Separate Rate Analysis for Jilin on January 2, 2018. The Department preliminarily determined
that Jilin was not entitled to a separate rate because it had not demonstrated an absence of de facto
governmental control as to its export functions. 	See PDM at 12; Preliminary Separate Rate
Analysis for Jilin (Jan. 2, 2018), C.R. 208, P.R. 309 (“SRM”) at 1, 6. 	Commerce’s specific
finding on state control concerned ownership of Jilin’s shares, and the Chinese government’s
ability to appoint members of Jilin’s board of directors and key operational positions. See SRM
at 5-6.
In its Final Results, Commerce continued to find that Jilin had not qualified for a separate
rate but that sixty-nine of the seventy-two companies requesting a separate rate had qualified for
one. Jiangsu, the only other mandatory respondent, was one of those that qualified for a separate
rate. Commerce calculated Jiangsu’s rate as de minimis (0.00 percent) and ultimately used this
rate as the all-others rate for the other separate rate respondents. See Final Results, 83 Fed. Reg.
at 35,462-63. Finding that Jilin was not entitled to a separate rate, Commerce apparently halted
any further examination of Jilin’s individual data and selected the pre-existing 25.62 percent
China-wide rate5 for Jilin. See Final IDM at 8; Final Results, 83 Fed. Reg. at 35,464. Jilin brought
its objections here.
5 	The 25.62 percent China-wide rate is based on application of “adverse facts
available,” and results from litigation that altered the original adverse facts available China-wide
rate of 58.84 percent. See Baroque Timber Indus. (Zhongshan) Co. v. United States, 38 CIT ___,
___, 971 F. Supp. 2d 1333, 1338-39 (2014) (“The changes . . . resulted in a new calculated highest
transaction-specific rate of 25.62 percent. Commerce selected this rate as the revised [adverse facts
available] rate for the [China]-wide entity.”); see also Final Results of Redetermination Pursuant to
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 6 of 35

Court No. 18-00191 	Page 7
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).
DISCUSSION
I. 	Commerce’s Determination of De Facto Government Control of Jilin Lacks the
Support of Substantial Evidence and Is Not in Accordance with Law
On the issue of whether Jilin is entitled to a separate rate, the question concerns
governmental control over Jilin’s export functions. 	See Policy Bulletin 05.1. 	Jilin contends
Commerce (1) ignored the evidence it placed on the record of the absence of government
involvement, (2) made certain assertions unsupported by substantial evidence, and (3) misapplied
the presumption of state control. See Pl.’s Br. 13-27. In particular, Jilin argues that Commerce’s
reliance late in the administrative review (not until the Final IDM), on the Aluminum Foil
investigation (“Aluminum Foil”),6 which was a separate proceeding that concerned, among other
issues, the status of labor unions in China, deprived the parties of the opportunity to rebut, clarify,
Court Order at 27, Baroque Timber Indus. (Zhongshan) Co. v. United States, No. 12-0007 (CIT
Nov. 14, 2013), ECF No. 132 (“Based on the updated [surrogate values], the highest calculated
transaction-specific rate on the record is 25.62 percent and, as a result, 25.62 percent is now the rate
assigned to the [China]-wide entity.”).
6 	As used in this opinion, “Aluminum Foil” refers collectively to the following
documents cited in the Final IDM at 8, notes 29 and 30: Certain Aluminum Foil From the People’s
Republic of China: Notice of Initiation of Inquiry Into the Status of the People’s Republic of China
as a Nonmarket Econ. Country Under the Antidumping & Countervailing Duty Laws, 82 Fed.
Reg. 16,162 (Dep’t Commerce Apr. 3, 2017); Certain Aluminum Foil From the People’s Republic
of China: Notice of Extension of Time for Public Comment Regarding Status of the People’s
Republic of China as a Nonmarket Econ. Country Under the Antidumping & Countervailing Duty
Laws, 82 Fed. Reg. 20,559 (Dep’t Commerce May 3, 2017); and Memorandum, “Aluminum Foil
from the People’s Republic of China: China’s Status as a Non-Market Economy” (Oct. 26, 2017).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 7 of 35

Court No. 18-00191 	Page 8
or correct new factual material placed on the administrative record by the Department as directed
by 19 C.F.R. § 351.301(c)(4). See Pl.’s Reply 8 (citing Final IDM at 8).
In the Final Results, Commerce found that Jilin was not entitled to a dumping rate separate
from the China-wide entity because it had not demonstrated that its export “activities” were de facto
free from government control:
In recent proceedings, we have concluded that where a government entity holds a
majority equity ownership, either directly or indirectly, in the respondent exporter,
the majority ownership holding in and of itself means that the government exercises,
or has the potential to exercise, control over the company’s operations. This may
include control over, for example, the selection of management, which is a key
factor in determining whether a company has sufficient independence in its export
activities to merit a separate rate. Consistent with normal practice, we would expect
any majority shareholder, including a government, to have the ability to control, and
an interest in controlling, the operations of the company, including the selection of
management and the profitability of the company. 	Therefore, in assessing the
degree of government control over [Jilin], we analyzed the level of government
ownership of [Jilin].
In the Preliminary Results, we found, after a review of each owner’s capital
verification report, that the majority of [Jilin]’s shares are held by a state-owned
enterprise (SOE). 	[Jilin] does not dispute this key fact. 	Rather, [Jilin] simply
reiterates arguments it made before the Preliminary Results as to why it is not
controlled by the government. 	For example, [Jilin] restates that its Articles of
Association establish that three of five members of the Board of Directors are elected
by [its] Labor Union, a non-governmental organization. This example, according to
[Jilin], demonstrates that it is free from the control, supervision, or interference of
any government entity. 	[Jilin]’s reiterated arguments are not responsive to
Commerce’s separate rate analysis. The crux of Commerce’s separate rate analysis
centers on the implications of majority government ownership, i.e., a potential,
ability, interest, etc., to control the company. [Jilin]’s arguments fail to resolve these
notable implications of the SOE’s ownership.
Final IDM at 7-8. 	The fuller determination was based on an analysis of the chain of company
ownership back to the Chinese government, the percentage of government ownership, the relevant
Company Law of China, Articles of Association provisions establishing shareholder rights, and
relevant legal precedent. 	See id. at 6-8; see also SRM at 3-6. 	Commerce insists that, where a
government entity holds a majority ownership share, either directly or indirectly, in the
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 8 of 35

Court No. 18-00191 	Page 9
respondent exporter, it may conclude that the majority ownership holding in and of itself means
that the government exercises, or has the potential to exercise, control over the company’s
operations generally. 	The Department further claims that this finding is consistent with this
Court’s Advanced Technology decisions. 	See Def.’s Br. 7-8; see also Advanced Tech.
& Materials Co. v. United States, 36 CIT 1576, 885 F. Supp. 2d 1343 (2012); Advanced Tech.
& Materials Co. v. United States, 37 CIT 1487, 938 F. Supp. 2d 1342 (2013), aff’d, 581 F. App’x
900 (Fed. Cir. 2014) (collectively, “Advanced Technology”).7
Jilin opposes Commerce’s position. It argues that its questionnaire responses made clear
that corporate control of the company was in the hands of its workers (the “Labor Union”) and not
those of “the majority government shareholder.” Pl.’s Br. 8-12. Acknowledging that a majority of
its shares are indirectly controlled by the government, Jilin argues substantial evidence shows that
the Labor Union controlled a majority of the board of directors and supervisors pursuant to the
company’s Articles of Association, which conferred upon the Labor Union the ability to select three
of the five members of the board of directors and two of the three operational supervisors:
[S]pecific terms contained in [Jilin]’s Articles of Association effectively restrain the
ability of the majority shareholder to exert control over the appointment of [Jilin]’s
board of directors and the selection of [its] senior management. Article 24 of the
Articles of Association designates [Jilin]’s board of directors, and not the
shareholders or the shareholders’ meeting, as the management decision-making
body of the company. . . . Thus, in accordance with Article 24.9 of the Articles of
Association, it is the board of directors, and not the Chinese government majority
shareholder, that appoints the company’s general manager and senior management.
7 	In Advanced Technology, Commerce ultimately reversed its original finding that
the respondent company was entitled to a separate rate, based on its reconsideration of the facts
on that record.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 9 of 35

Court No. 18-00191 	Page 10
Pl.’s Reply 1-2 (citing Jilin’s 4th Suppl. Resp. (Sept. 29, 2017), C.R. 178, P.R. 282, Ex. S4-2 at 3).
Jilin thus contends that Commerce’s interpretation of Advanced Technology unlawfully imposed
an “irrebuttable” presumption of de facto government control in the Final Results. See Pl.’s Br. 14.
Commerce, however, faults Jilin’s implicit assumption regarding the “independence” of its
Labor Union. In response to Jilin’s “selection of management” argument, the Department, albeit
late in the game, placed on the record “factual information” from the Aluminum Foil nonmarket
economy inquiry. 	See Final IDM at 8 (citing Aluminum Foil); see also 19 C.F.R. § 351.301
(2018). 	In the course of the Aluminum Foil inquiry, Commerce evaluated the extent to which
wage rates in China are determined by free bargaining between labor and management and
concluded that “[l]abor unions are under the control and direction of the All-China Federation of
Trade Unions (ACFTU), a government-affiliated [Chinese Communist Party] organ.” Final IDM
at 8. 	Commerce applied its Aluminum Foil findings to Jilin’s facts when considering the
“autonomy” of Jilin’s Labor Union and found that “[t]his [Aluminum Foil] determination is not
undermined by [Jilin]’s excerpts from the Trade Union Law and assertion that the labor union is
not under government ownership. Therefore, [Jilin]’s reliance on the labor union’s control over
the selection of management does not rebut the finding of government control.” Final IDM at 8.
Jilin complains of the eleventh-hour placement, by Commerce, of factual information
from the Aluminum Foil proceeding, and disputes its relevance to this case. 	Jilin states in its
briefs that its “Labor Union does not operate under Chinese Government control,” arguing that
Aluminum Foil relates to a different proceeding, different labor union, and different issue
(specifically, whether wage rates in China were determined by free bargaining between labor and
management) from the issue before Commerce in this proceeding, which is whether Jilin’s
selection of its management was made in the absence of Chinese government control. See Pl.’s
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 10 of 35

Court No. 18-00191 	Page 11
Br. 26. 	After restating relevant provisions of its Articles of Association that vest in the Labor
Union the ability to appoint members to the boards of directors and supervisors, Jilin concludes
“[t]here is no evidence [in its] Articles of Association that indicate[s] that any of the activities or
the elections of the Labor Union are influenced or controlled by any level of the Chinese
government.” Pl.’s Br. 26-27.
By regulation, Commerce permits itself, at any time, to place factual information on the
record. See 19 C.F.R. § 351.301(c)(4). If Commerce does so, however, it is generally required
by that regulation to permit an opportunity for a party to respond to such information. Here,
Commerce contends that Jilin did, in fact, have an opportunity to comment on the Aluminum Foil
proceeding, as the proceeding’s notice published in the Federal Register solicited comments from
the public at large. 	See Def.’s Br. 15. 	The notice-and-comment of that proceeding, however,
does not satisfy the requirement that Jilin be afforded the opportunity to respond to the new
information placed on the record in this proceeding. See 19 C.F.R. § 351.301(c)(4).
Commerce placed Aluminum Foil on the record late in the proceeding, alerting the parties
to it only in its Final IDM. 	This information had the effect of placing Jilin under the Chinese
government’s control despite the company having been able to demonstrate the absence of
government control in previous reviews. As mentioned above, Commerce’s argument that Jilin
had an opportunity to address the labor union issue in another proceeding to which Jilin was not
a party is without merit.
Jilin must be given “a meaningful opportunity to be heard.” 	See PSC VSMPO-Avisma
Corp. v. United States, 688 F.3d 751, 761-62 (Fed. Cir. 2012) (quoting LaChance v. Erickson,
522 U.S. 262, 266 (1998)). On remand, Commerce shall permit Jilin, in advance of draft remand
results and in accordance with 19 C.F.R. § 351.301(c)(4), to submit written argument with respect
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 11 of 35

Court No. 18-00191 	Page 12
to the Department’s inclusion of the Aluminum Foil proceeding on the record of this review, and
shall consider such argument in its draft remand results.
In addition, it is worth emphasizing that the fundamental question here concerns state
control over export functions. 	See Policy Bulletin 05.1 (“Typically, the Department considers
four factors in evaluating whether each respondent is subject to de facto governmental control of
its export functions.”). 	There is little discussion of this in the Final Results, in particular how
“majority equity ownership” translates into control of export functions. On remand, the
Department shall explain its use of the phrase, and state whether “export functions” are
synonymous with “export activities” or “company’s operations.” Further, Commerce shall state
whether analysis of “export functions” is required as part of its de facto control analysis, and if
so, how that consideration affects its remand results, and how the phrase figures in this case. The
Department shall also consider any relevant arguments presented by Jilin to Commerce on the
issue of state control.
II. 	Commerce Has Failed to Explain How the Application of Its NME Policy to Jilin Is
in Accordance with Law and Supported by Substantial Evidence
A. 	Jilin’s Legal Status as a Mandatory Respondent
1. 	Individually-Examined Respondents
Commerce is required to “determine the individual weighted average dumping margin for
each known exporter and producer of the subject merchandise.” 19 U.S.C. § 1677f-1(c)(1). That
determination normally requires calculating the dumping margin for “each entry” of subject
merchandise. See id. § 1675(a)(2)(A)(i), (ii). The “dumping margin” is “the amount by which
the normal value exceeds the export price or constructed export price of the subject merchandise.”
Id. § 1677(35)(A). Normal value is “the price at which the foreign like product is first sold . . .
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 12 of 35

Court No. 18-00191 	Page 13
for consumption in the exporting country.” Id. § 1677b(a)(1)(B)(i). If the exporting country is a
market economy country, Commerce determines normal value using sales prices or constructed
normal value in the home market—or if there are no sales prices in the home market, Commerce
may use sales prices in a third country. See id. § 1677b(a); see also 19 C.F.R. §§ 351.403-.407.
If the exporting country is a nonmarket economy country, Commerce determines normal value
based on a nonmarket economy producer’s factors of production using values obtained from a
surrogate market economy country or countries. See 19 U.S.C. § 1677b(c); see also 19 C.F.R.
§ 351.408.
The congressional goal of directing this exercise (and the goal found in treaties and
agreements to which the United States is a signatory) is for Commerce to determine an accurate
margin for each respondent. See Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345,
1356 (Fed. Cir. 2016) (“‘[T]here is a clear congressional intent’ that administrative reviews ‘be
as accurate and current as possible.’”) (quoting Allegheny Ludlum Corp. v. United States, 346
F.3d 1368, 1373 (Fed. Cir. 2003)); Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716
F.3d 1370, 1379 (Fed. Cir. 2013) (emphasis added) (“An overriding purpose of Commerce’s
administration of antidumping laws is to calculate dumping margins as accurately as possible.”)
(citing Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)).
In the usual case, where Commerce calculates the rates for individual respondents, the
calculation of each dumping margin is determined by using a respondent’s own data. 	See 19
U.S.C. § 1677f-1(c)(1) (“In determining weighted average dumping margins under section
1673b(d), 1673d(c), or 1675(a) of this title, the administering authority shall determine the
individual weighted average dumping margin for each known exporter and producer of the subject
merchandise.”); id. § 1677a (defining export price and constructed export price); id. § 1677(16),
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 13 of 35

Court No. 18-00191 	Page 14
(25) (defining foreign like product and subject merchandise, respectively). The statute provides
for an exception, however, under circumstances that are described in 19 U.S.C. § 1677f-1(c)(2)
(the “Mandatory Respondent Exception”).
2. 	The Statute’s Mandatory Respondent Exception
The Mandatory Respondent Exception is used when the number of respondents in a
proceeding is so “large” that it is “not practicable to make individual weighted average dumping
margin determinations.” 	19 U.S.C. § 1677f-1(c)(2). 	When that occurs, Commerce may
determine the weighted-average dumping margins for a “reasonable” number of exporters or
producers by limiting its examination to (1) “a sample of exporters, producers, or types of
products that is statistically valid based on the information available to the administering authority
at the time of selection,” or (2) “exporters and producers accounting for the largest volume of the
subject merchandise from the exporting country that can be reasonably examined.” 	Id.
§ 1677f-1(c)(2)(A), (B). The weighted average of the rates for each mandatory respondent forms
the 	basis 	of 	the 	all-others 	rate 	for 	respondents 	not 	individually 	examined. 	See 	id.
§ 1673d(c)(1)(B)(i). 	Here, noting the “large” number of respondents in the underlying
proceeding, Commerce chose to employ this Mandatory Respondent Exception and base the
determination of the all-others rate8 on the rate determined for two mandatory respondents, which
were the two largest exporters of subject merchandise by volume during the period of review.
See RSM at 1. Jilin was one of these. The other was Jiangsu.
The aim of the Mandatory Respondent Exception is to determine an accurate all-others
rate, based on a weighted average of rates determined for mandatory respondents by statistical
8 	Although, as shall be seen, just what the “all-others” rate is, has some mystery
connected to it. See, e.g., Thuan An Prod. Trading & Serv. Co. v. United States, 42 CIT __, ___,
348 F. Supp. 3d 1340, 1347 (2018).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 14 of 35

Court No. 18-00191 	Page 15
sampling or the use of a statistically sufficient volume of exports. The statute directs Commerce
to (1) “determine the estimated weighted average dumping margin for each exporter and producer
individually investigated” and (2) “determine” in accordance with the statute’s method “the
estimated all-others rate for all exporters and producers not individually investigated.” 19 U.S.C.
§ 1673d(c)(1)(B)(i), (c)(5)(B). Use of the Mandatory Respondent Exception is intended to fulfill
the prime purpose of the antidumping duty statute to calculate accurate rates. Compare 19 U.S.C.
§ 1677f-1(c)(2), with 19 U.S.C. § 1673d(c)(1)(B)(i). The role of the mandatory respondents is
therefore broader than that of the usual individually-examined respondent, because the mandatory
respondents serve as surrogates for what can be (and is, in this case) a much larger group.
Commerce now employs the Mandatory Respondent Exception often, and reviews only a
limited number of selected respondents. See, e.g., Certain Fresh Cut Flowers From Colombia:
Preliminary Results & Partial Rescission of Antidumping Duty Admin. Rev., 62 Fed. Reg. 16,772
(Dep’t Commerce Apr. 8, 1997). Indeed, Commerce’s practice has devolved to the point where
it regularly chooses only two (and sometimes one9 ) mandatory respondents to be “representative”
of unexamined respondents for the purpose of calculating the all-others rate in a review, a
devolution that this Court has regarded with some skepticism. See, e.g., Zhejiang Native Produce
& Animal By-Products Imp. & Exp. Corp. v. United States, 33 CIT 1125, 637 F. Supp. 2d 1260
(2009); Carpenter Tech. Corp. v. United States, 33 CIT 1721, 662 F. Supp. 2d 1337 (2009).
9 	See, e.g., Certain Carbon & Alloy Steel Cut-To-Length Plate From the People’s
Republic of China: Preliminary Affirmative Determination of Sales at Less Than Fair Value, 81
Fed. Reg. 79,450, 79,451 (Dep’t Commerce Nov. 14, 2016) (Commerce selected one entity as
“the sole mandatory respondent in this investigation”). In Jilin’s case, Commerce chose the two
respondents that together accounted for a “large” share of the export volume of subject
merchandise, although not the majority of such export volume, and it subsequently relied only on
Jiangsu’s data.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 15 of 35

Court No. 18-00191 	Page 16
Even when Commerce does choose two mandatory respondents (and despite having
replaced or substituted mandatory respondents in the past10 ), it has more recently declined to name
a mandatory respondent replacement when it became clear that a chosen mandatory entity would
not participate or is otherwise excluded from examination. See, e.g., Bestpak, 716 F.3d at 1374.
When one of two chosen mandatory respondents does not participate or is excluded from
participation, a failure to name a replacement can result (as it did here) in an all-others rate being
determined based on the margin of a sole respondent whose percentage of export volume is quite
small in relation to the total volume of exports. See, e.g., Stainless Steel Sheet & Strip From the
People’s Republic of China: Preliminary Affirmative Determination of Sales at Less Than Fair
Value & Preliminary Affirmative Determination of Critical Circumstances, 81 Fed. Reg. 64,135
(Dep’t Commerce Sept. 19, 2016), and accompanying decision memorandum.
In November 2013, Commerce announced changes in its method of selecting mandatory
respondents. 	See Antidumping Procs.: Announcement of Change in Dep’t Practice for
Respondent Selection in Antidumping Duty Procs. & Conditional Review of the Nonmarket Econ.
Entity in NME Antidumping Duty Procs., 78 Fed. Reg. 65,963 (Dep’t Commerce Nov. 4, 2013)
(“Practice Change”).
As originally enacted, a 1984 change in the statute permitted Commerce to use “statistical
sampling” of products “whenever a significant volume of sales is involved or a significant number
of adjustments to prices is required.”11 See Pub. L. No. 98-573, § 620(a), 98 Stat. 2948, 3039
10 	See, e.g., Certain Kitchen Appliance Shelving & Racks from the People’s Republic
of China: Postponement of the Preliminary Determination of the Antidumping Duty Investigation,
73 Fed. Reg. 78,721 (Dep’t Commerce Dec. 23, 2008).
11 	The authority to sample “types of products” in 19 U.S.C. § 1677f-1(c)(2)(A) is a
carryover from the original statute, 19 U.S.C. § 1677f-1(a), that was added to the Tariff Act ten
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 16 of 35

Court No. 18-00191 	Page 17
(1984). With passage of the Uruguay Round Agreements Act in 1994, Commerce’s mandatory
respondent selection practice came to rely generally upon the then-new provision of 19 U.S.C.
§ 1677f-1(c)(2) for “exporters and producers accounting for the largest volume of the subject
merchandise from the exporting country that can be reasonably examined” (“subsection (B)”),
and it resorted to using the “statistically valid” sampling provision (“subsection (A)”) only rarely.
See Proposed Methodology for Respondent Selection in Antidumping Procs.; Req. for Cmt., 75
Fed. Reg. 78,678, 78,678 (Dep’t Commerce Dec. 16, 2010) (“Proposed Methodology”) (emphasis
added) (the Department has used subsection (B) in “virtually every one of its proceedings”). The
2013 Practice Change announced that Commerce would
consider sampling when it can select a minimum of three respondents to examine
individually and when the three largest respondents (or more if the Department
intends to select more than three respondents) by import volume of the subject
merchandise under review account for normally no more than 50 percent of total
years prior to passage of the Uruguay Round Agreements Act (“URAA”). See Pub. L. No. 98-
573, § 620(a), 98 Stat. 2948, 3039 (1984). 	As originally enacted, § 1677f-1(a) permitted
Commerce to use “generally recognized sampling techniques whenever a significant volume of
sales is involved or a significant number of adjustments to prices is required,” provided “such
samples and averages shall be representative of the transactions under investigation.” 19 U.S.C.
§ 1677f-1(a) (Supp. II 1984). 	Section 229 of the URAA slightly altered this congressional
delegation in subsection (a):
For purposes of determining the export price (or constructed export price) under
section 1677a of this title or the normal value under section 1677b of this title, and
in carrying out reviews under section 1675 of this title, the administering authority
may . . . use averaging and statistically valid samples, if there is a significant
volume of sales of the subject merchandise or a significant number or types of
products, and . . . decline to take into account adjustments which are insignificant
in relation to the price or value of the merchandise.
Pub. L. No. 103-465, § 229, 108 Stat. 4809, 4889 (1994). In conjunction with the authority of
subsection (a) of 19 U.S.C. § 1677f-1 to sample products, Congress in subsection (c)(2) of 19
U.S.C. § 1677f-1 also permitted Commerce to sample respondent exporters and producers, as an
exception to the general rule of subsection (c)(1) requiring Commerce to determine the individual
weighted-average dumping margin for each known exporter and producer of the subject
merchandise. See id.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 17 of 35

Court No. 18-00191 	Page 18
volume. The Department considers 50 percent [of import volume] to be a
reasonable threshold because in these circumstances the agency would be able to
calculate specific dumping margins for the majority of imports during a period of
review.
Practice Change, 78 Fed. Reg. at 65,968 (emphasis added).
Thus, the Practice Change announced that Commerce would use the statistical sampling
found in subsection (A) only if certain conditions were met. Otherwise, subsection (B) (volume)
would be used. 	Specifically, Commerce would use the sampling of subsection (A) “where
possible” on a case-by-case basis for the selection of mandatory respondents, 12 if interested
parties made a specific request to use that method. See Proposed Methodology, 75 Fed. Reg. at
78,678. Commerce, however, would forgo the subsection (A) option (and rely on the (B) option):
(1) if it is unable to examine at least three companies “due to resource constraints”; or (2) when
the largest companies by import volume account for at least 50 percent of total imports; or
(3) when the “characteristics” of the underlying population make it highly likely that results
obtained from the largest possible sample would be unreasonable to represent the population (i.e.,
when “information obtained by or provided to the Department provides a reasonable basis to
believe or suspect that the average export prices and/or dumping margins for the largest exporters
differ from such information that would be associated with the remaining exporters”). Practice
Change, 78 Fed. Reg. at 65,964-65.
12 	See, e.g., Certain Steel Nails From the People’s Republic of China: Preliminary
Results of the Antidumping Duty Admin. Rev. & Preliminary Determination of No Shipments;
2017-2018, 84 Fed. Reg. 55,906 (Dep’t Commerce Oct. 18, 2019); Certain Steel Nails From the
People’s Republic of China: Preliminary Results of the Antidumping Duty Admin. Rev. &
Preliminary Determination of No Shipments; 2016-2017, 83 Fed. Reg. 45,883 (Dep’t Commerce
Sept. 11, 2018); Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam:
Preliminary Results of Antidumping Duty Admin. Rev.; 2013-2014, 80 Fed. Reg. 12,441 (Dep’t
Commerce Mar. 9, 2015).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 18 of 35

Court No. 18-00191 	Page 19
There can be little doubt that relying almost exclusively on subsection (B) made
Commerce’s work easier, while still, at least arguably, using a sufficiently large sample of imports
to calculate an accurate rate for the unexamined respondents receiving the all-others rate. 	Cf.
Practice Change, 78 Fed. Reg. at 65,968. The Department, however, does not appear to always
follow the guidance of the Practice Change. See, e.g., id. (“The Department considers 50 percent
[of import volume] to be a reasonable threshold because in these circumstances the agency would
be able to calculate specific dumping margins for the majority of imports during a period of
review.”).
Although authorizing a different method for determining the rate for unexamined
respondents, there is nothing in the language of the Mandatory Respondent Exception exempting
Commerce from its statutory duty to determine a dumping margin for Jilin as a “known” exporter
or producer that is selected for examination using its own information. 	Compare 19 U.S.C.
§ 1677f-1(c)(2), with 19 U.S.C. § 1673d(c)(1)(B)(i) (the Department must (I) “determine the
estimated weighted average dumping margin for each exporter and producer individually
investigated” and (II) “determine” in accordance with the statute’s methodology “the estimated
all-others rate for all exporters and producers not individually investigated”); see also Statement
of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-
316, Vol. 1 at 872 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4200 (“Commerce will calculate
individual dumping margins for those firms selected for examination and an ‘all others’ rate to be
applied to those firms not selected for examination.”).
Nor does the Mandatory Respondent Exception free Commerce from its duty to determine
an accurate rate for both the unexamined and examined respondents. See Albemarle, 821 F.3d at
1356. Considering that Commerce now routinely identifies only two mandatory respondents to
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 19 of 35

Court No. 18-00191 	Page 20
act as stand-ins for numerous unexamined respondents, the statutory requirement of calculating a
rate for each respondent selected for individual examination using its own data becomes all the
more important in satisfying the accuracy requirement.13 Cf. id.
3. 	Commerce’s “Nonmarket Economy” Policy
Over the years, Commerce has developed an administrative practice of applying a
rebuttable presumption that all companies within a nonmarket economy country are controlled by
the government of that country, i.e., the “NME Policy.” The NME Policy has not been formalized
by regulation but is found in the Notice of Final Determination of Sales at Less Than Fair Value:
Silicon Carbide From the People’s Republic of China, 59 Fed. Reg. 22,585 (Dep’t Commerce
May 2, 1994) (“Silicon Carbide”) as well as the Final Determination of Sales at Less Than Fair
Value: Sparklers From the People’s Republic of China, 56 Fed. Reg. 20,588 (Dep’t Commerce
May 6, 1991) (“Sparklers”).
13 	Although no party has challenged the selection of the mandatory respondents or
the impact of ignoring the data for Jilin and using only Jiangsu’s data to calculate the all-others
rate, it is unlikely that substantial evidence supports a finding that that rate was determined, in
this instance, in accordance with the statute’s injunction that it be determined by “exporters and
producers accounting for the largest volume of the subject merchandise from the exporting
country that can be reasonably examined.” 	19 U.S.C. § 1677f-1(c)(2)(B); compare RSM at 1
(Commerce, opting for the Mandatory Respondent Exception, anticipated that the determination
of the all-others rate would be based on the weighted-average rates determined for both Jilin and
Jiangsu, the two largest exporters of subject merchandise by volume), with Practice Change, 78
Fed. Reg. at 65,968:
The Department considers 50 percent to be a reasonable threshold [for sampling]
because in these circumstances the agency would be able to calculate specific
dumping margins for the majority of imports during a period of review. However,
when [the act of] selecting the largest respondents does not allow the Department
to calculate dumping margins for the majority of imports, and the Department has
the resources to review at least three respondents, the Department may choose to
sample in view of the enforcement concerns discussed herein.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 20 of 35

Court No. 18-00191 	Page 21
The problem the NME Policy was meant to address was that the Chinese government, in
particular, had been less than forthcoming with information about its involvement in Chinese
companies, after changes in the laws of China were introduced in the period prior to 1991. Cf.
Iron Construction Castings From the People’s Republic of China; Final Results of Antidumping
Duty Admin. Rev., 56 Fed. Reg. 2,742, 2,743-44 (Dep’t Commerce Jan. 24, 1991). 	Until that
time, Commerce, consistent with the statute, had calculated separate individual rates for all
respondents within a nonmarket economy country. See Transcom, Inc. v. United States, 294 F.3d
1371, 1373 (Fed. Cir. 2002). Changes in Chinese law, or its administration, led to difficulties for
Commerce in trying to determine whether certain respondents were truly independent of state
control. See, e.g., Iron Construction Castings From the People’s Republic of China, 56 Fed. Reg.
at 2,744.
To address these difficulties, Commerce adopted a policy that imposed an additional
burden of proof on each respondent from a nonmarket economy country seeking an individual
separate rate, requiring it to demonstrate independence from state control. The presumption that
every respondent is subject to state control implies that every respondent is part of a single
“entity,” an amalgam of all firms in the industry within the nonmarket economy country, and that
these respondents should receive a single country-wide rate. Thus, the nonmarket economy entity
(“NME Entity”) is not “the State” itself but consists of producers or exporters controlled by “the
State.” 	The NME Policy placed all respondent-exporters within such a single NME Entity—a
country-wide legal fiction employed for convenience—until such time as Commerce is persuaded
otherwise with respect to any individual respondent.14
14 	In Jilin’s case, for example, under “Exporters” the Order lists a “PRC-wide Entity”
with its own rate that is distinct from the separate all-others rate (discussed further infra) that
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 21 of 35

Court No. 18-00191 	Page 22
Apparently, one idea behind the NME Policy was that a respondent facing the prospect of
an AFA-determined rate would “encourage” a reluctant Chinese government to comply with
Commerce’s requests for information or that the Chinese government would itself be motivated
to seek to avoid having its domestic businesses receive a rate based on AFA. See Tianjin Mach.
Imp. & Exp. Corp. v. United States, 16 CIT 931, 932-37, 806 F. Supp. 1008, 1011-12 (1992). The
NME Policy was thus designed as an inducement for cooperation and participation. 	That is,
through AFA, the NME Policy is intended to encourage respondents and their governments to be
forthcoming with respect to Commerce’s requests for information in administrative proceedings.
Some support for the general idea of inducement has been found in such cases as Fine
Furniture (Shanghai) Ltd. v. United States and KYD, Inc. v. United States. See Fine Furniture,
748 F.3d at 1373 (remedy that collaterally reaches respondent-plaintiff has the potential to
encourage China to cooperate so as not to hurt its overall industry); KYD, Inc. v. United States,
607 F.3d 760, 768 (Fed. Cir. 2010) (the AFA rate calculated for a non-cooperating exporter could
be applied to a cooperating importer of that exporter’s goods). The reasoning in these cases is,
however, inapplicable to cases where the collaterally injured respondent could not possibly
influence the behavior of a third party or, as is the case here, where the cooperation of, or
information concerning, the third party (China) is not sought.
The NME Policy has not been codified by regulation and remains policy. 	The closest
Commerce came to formalization was in 1997 when it published its regulation to calculate a
“single rate” for producers and exporters from a nonmarket economy country. See Antidumping
Duties; Countervailing Duties, 62 Fed. Reg. 27,296 (Dep’t Commerce May 19, 1997); see also
Commerce applied to respondents who had not been individually investigated or reviewed. See
Order, 76 Fed. Reg. at 76,692-93.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 22 of 35

Court No. 18-00191 	Page 23
19 C.F.R. § 351.107(d) (“In an antidumping proceeding involving imports from a nonmarket
economy country, ‘rates’ may consist of a single dumping margin applicable to all exporters and
producers.”). Participants had urged Commerce to codify the NME Policy, but it has declined to
do so, concluding that the nature of nonmarket economies is not static. See 62 Fed. Reg. at 27,304
(“[B]ecause of the changing conditions in those [nonmarket economy] countries most frequently
subject to [antidumping duty] proceedings, we do not believe it is appropriate to promulgate the
presumption [that all exporters and producers of such countries are subject to state control] or the
separate rates test in these regulations. Instead, we intend to continue developing our policy in
this area, and the comments that were submitted will help us in that process.”).
Development of the policy has had its critics. See, e.g., China Mfrs. All., LLC v. United
States, 41 CIT ___, ___, 205 F. Supp. 3d 1325, 1340 (2017) (“Commerce may not exercise the
discretion inherent in [19 C.F.R. § 351.107(d)], which states that rates ‘may’ consist of a single
margin, to apply a single antidumping duty margin to all exporters and producers in a nonmarket
economy country in a way that fails to heed the statutory requirement to assign an individual
weighted average dumping margin to a fully cooperative exporter or producer it designated for
individual examination pursuant to 19 U.S.C. § 1677f-1(c) [i.e., the sampling and averaging
statute, including the Mandatory Respondent Exception].”).
Nevertheless, the use of the NME Policy has been applied to various factual situations.
After the announcement of Antidumping Duties; Countervailing Duties, the Federal Circuit in
Sigma Corp. v. United States, held that the employment of a presumption of state control for
exporters in a nonmarket economy
was within Commerce’s authority . . . . Moreover, because exporters have the best
access to information pertinent to the “state control” issue, Commerce is justified
in placing on them the burden of showing a lack of state control.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 23 of 35

Court No. 18-00191 	Page 24
Sigma Corp. v. United States, 117 F.3d 1401, 1405-06 (Fed. Cir. 1997) (first citing 19 U.S.C.
§ 1677(18)(B)(iv), (v); and then citing Zenith Elecs. Corp. v. United States, 988 F.2d 1573, 1583
(Fed. Cir. 1993) (“The burden of production should belong to the party in possession of the
necessary information.”)).
Following Sigma, the Federal Circuit was presented with a number of specific factual
situations demonstrating how Commerce administers its NME Policy when considering the cases
of individual plaintiffs. In an unpublished decision, the Federal Circuit agreed that “substantial
evidence supported Commerce’s conclusion that the specified brake rotor exporters satisfied their
burden of establishing their de jure and de facto independence from the central government and
were therefore not required to be assigned a country-wide antidumping rate.” Coal. for Pres. of
Am. Brake Drum & Rotor Aftermarket Mfrs. v. United States, 232 F.3d 913 tbl., 2000 WL 380087,
at *3 (Fed. Cir. Apr. 13, 2000). 	In AMS Associates, Inc. v. United States, the Federal Circuit
considered the case of the plaintiff’s affiliate, a Chinese exporter that withdrew from the
administrative review and removed its confidential information from the record after initially
showing independence from the Chinese government. See AMS Assocs., Inc. v. United States,
719 F.3d 1376 (Fed. Cir. 2013). There, the Federal Circuit upheld this Court’s decision that the
circumstances necessarily indicated that the affiliate was unable to carry its burden of
affirmatively showing lack of de jure and de facto control by the Chinese government, because
the remaining public information on the record did not include verifiable evidence that would be
necessary to establish the affiliate’s eligibility for a separate rate, and it was thus not entitled to a
separate company-specific antidumping duty rate. 	Id. at 1380-81. 	To give another example,
Dongtai Peak Honey Indus. Co. v. United States, the Federal Circuit likewise reviewed the record
and concluded “substantial evidence supports Commerce’s determination that [the appellant]
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 24 of 35

Court No. 18-00191 	Page 25
failed to demonstrate the absence of de facto and de jure government control, as required for
separate-rate status,” because the record lacked information as to shareholders, management,
accounting practices, corporate structure, and affiliations, as well as information addressing
whether several organizations to which the plaintiff belonged were state-sponsored, controlled
the plaintiff’s business operations, or coordinated its “export activities.” 	Dongtai Peak Honey
Indus. Co. v. United States, 777 F.3d 1343, 1353-54 (Fed. Cir. 2015). 	These and other cases
indicate that the Federal Circuit has addressed the NME Policy on a case-by-case basis,15 and
because it is policy, rather than a regulation, the Court has sustained the Policy’s use only for the
facts before it.
As the NME Policy currently stands, an exporter may overcome the presumption of state
control only by persuading Commerce that its export functions are subject to neither de jure nor
de facto control by the state. If Commerce is not persuaded that an exporter is independent from
state control, then the exporter is assigned the NME Entity rate—which, to the court’s knowledge,
is always based on AFA. Commerce has extended what amounts to an AFA “policy” rate even
to cooperative “mandatory” respondents based on their inability to rebut the presumption of state
control. See Multilayered Wood Flooring From the People’s Republic of China: Final Results of
Antidumping Duty Admin. Rev. & Final Determination of No Shipments; 2016-2017, 84 Fed. Reg.
38,002 (Dep’t Commerce Aug. 5, 2019).
The NME Policy thus accomplishes a result that cannot be achieved through application
of the AFA statute: under particular circumstances, for cooperative respondents that fail to rebut
15 	See SEC v. Chenery Corp., 332 U.S. 194, 203 (1947) (“[T]he choice made between
proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the
informed discretion of the administrative agency.”) (citing CBS v. United States, 316 U.S. 407,
421 (1942)).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 25 of 35

Court No. 18-00191 	Page 26
the presumption of state control, Commerce may apply a rate based on AFA16 (the China-wide
rate) without (1) finding a “gap” in the individual factual record of the respondent that would
justify the use of facts available, and without (2) finding a failure in the behavior of the respondent
justifying the use of an adverse inference.17 See Fine Furniture, 748 F.3d at 1371. In other words,
Commerce believes it does not have to make the requisite findings under 19 U.S.C. § 1677e(a)-
(b) in order to impose an AFA-inclusive margin on a respondent. It believes the AFA rate may
be imposed because the respondent is presumed to be under state control.
Still, the essential purpose of the NME Policy seems to be to encourage compliance, not
to punish respondents for failing to prove their independence from the state. 	Were the
administrative application of the NME Policy employed to justify punishment, it would be in
violation of the statute. See SKF USA Inc. v. United States, 29 CIT 969, 979, 391 F. Supp. 2d
1327, 1336 (2005) (“Section 1677e(b) is geared to promote cooperation by respondents, but not
impose ‘punitive, aberrational, or uncorroborated’ margins; this is evidenced in the 19 U.S.C.
16 	See, e.g., Small Diameter Graphite Electrodes from the People’s Republic of
China: Final Results of the First Admin. Rev. of the Antidumping Duty Order & Final Rescission
of the Admin. Rev., in Part, 76 Fed. Reg. 56,397, 56,399 (Dep’t Commerce Sept. 13, 2011)
(adverse facts available applied to adjust certain of cooperating mandatory respondent’s reported
factors of production resulting in final margin of 56.63 percent); Wooden Bedroom Furniture
From the People’s Republic of China: Preliminary Results of Antidumping Duty Admin. & New
Shipper Revs. & Partial Rescission of Rev., 74 Fed. Reg. 6,372, 6,379 (Dep’t Commerce Feb. 9,
2009) (adverse facts available applied to adjust certain of cooperating mandatory respondent’s
reported factors of production resulting in a preliminary margin of 124.31 percent).
17 	Commerce must make two separate findings before resorting to AFA. 	First,
Commerce must find that it has to resort to “facts available” “[i]f . . . necessary information is not
available on the record, or . . . an interested party or any other person . . . fails to provide . . .
information [that has been requested by Commerce] . . . in the form and manner requested” or
“significantly impedes” a proceeding. 19 U.S.C. § 1677e(a)(1)-(2)(B), (C). Second, Commerce
must find that “an interested party has failed to cooperate by not acting to the best of its ability to
comply with a request for information.” Only at that point may Commerce use an adverse
inference “in selecting from among the facts otherwise available.” Id. § 1677e(b)(1).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 26 of 35

Court No. 18-00191 	Page 27
§ 1677e(c) corroboration requirement which intends the AFA rate ‘to be a reasonably accurate
estimate of the respondent’s actual rate, albeit with some built-in increase intended as a deterrent
to non-compliance.’”) (quoting F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States,
216 F.3d 1027, 1032 (Fed. Cir. 2000)); Am. Silicon Techs. v. United States, 26 CIT 1216, 1223,
240 F. Supp. 2d 1306, 1312-13 (2002) (“Although an adverse facts available margin is to have
‘some built-in increase intended as a deterrent to non-compliance’ in this instance it is so far
removed from being ‘a reasonably accurate estimate of the respondent’s actual rate’ that it is
disproportionately punitive in nature.”) (quoting De Cecco, 216 F.3d at 1032). The long history
of U.S. unfair trade law has repeatedly emphasized its remedial intent. 	See Sunpreme Inc. v.
United States, 946 F.3d 1300, 1321 (Fed. Cir. 2020) (citations omitted) (describing repeated
congressional iteration of the “curative purpose” and “remedial intent” of the statutory scheme).
Thus, punitive application of the statute has routinely been rejected.
Although Commerce argues otherwise, under the facts of this case, Commerce’s NME
Policy is entitled to no deference. 	While courts have authorized the Policy’s use in specific
situations, it has never been reduced to a regulation, and the only writings purporting to explain
the Policy are found in Sparklers, Silicon Carbide, and other individual administrative
determinations. And, while the Policy’s use has been confirmed by the courts in specific factual
situations, no court may provide the explanation for its lawful use in any case where the
Department has not supplied one itself. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204,
212 (1988) (no deference “to an agency counsel’s interpretation of a statute where the agency
itself has articulated no position on the question”); see also Prime Time Commerce LLC v. United
States, 43 CIT ___, ___ n.14, 396 F. Supp. 3d 1319, 1331 n.14 (2019) (“[I]t is not for this court
to provide a rationale supporting Commerce’s determination.”).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 27 of 35

Court No. 18-00191 	Page 28
Judicial review of an agency’s construction of the statute begins with whether Congress
“has directly spoken to the precise question at issue,” because if it has, and Congress’ intent is
clear, then “that is the end of the matter,” and effect is given to the unambiguously expressed
intent of Congress. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43
(1984). 	When deciding if Congress has clearly expressed its intent, courts use the usual tools
including the canons of statutory construction and legislative history to find the meaning of the
words they have before them. 	If the statute is silent or ambiguous with respect to the specific
issue, then the question is whether the agency’s interpretation is based on a permissible
construction of the statute. See id. at 843. The agency’s construction need not be the only—or
even the most reasonable—interpretation, see Zenith Radio Corp. v. United States, 437 U.S. 443,
450 (1978), but no deference is given “where the agency itself has articulated no position on the
question . . . .” Bowen, 488 U.S. at 212. Also, in contrast to regulations, agency “interpretations
contained in policy statements, agency manuals, and enforcement guidelines . . . lack the force of
law [and] do not warrant Chevron-style deference.” Christensen v. Harris County, 529 U.S. 576,
587 (2000); cf. United States v. Mead Corp., 533 U.S. 218, 230 (2001) (an agency’s statutory
interpretations are due Chevron deference when articulated in “a relatively formal administrative
procedure tending to foster the fairness and deliberation that should underlie a pronouncement”
having the force of law). Importantly, courts may not provide a reasoned interpretation when an
agency, such as Commerce, has not.
Unlike a reasoned statutory interpretation, a policy lacking any clear expression of why
an agency has chosen to implement a statute in a particular manner is entitled to no deference,
because no court can determine if the policy represents a reasonable interpretation of the statute
or not. In addition, policies, like the NME Policy, do not merit “Skidmore” deference, because an
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 28 of 35

Court No. 18-00191 	Page 29
unexplained policy does not have the “power to persuade.” 	See Skidmore v. Swift & Co., 323
U.S. 134, 140 (1944). It is worth repeating that courts cannot provide the reasons to justify an
agency’s particular interpretation of a statute. The agency must supply the interpretation, and the
courts then determine if it is reasonable.
As far as the court’s knowledge extends, Commerce has never performed a Chevron
analysis18 with respect to the specific statute Commerce claims to be construing when applying
the NME Policy—nor, for that matter, has Commerce clearly identified the statute whose silence
or ambiguity requires interpretation. In particular, Commerce has never explained why the NME
Policy should apply to rates being determined pursuant to the Mandatory Respondent Exception
or identified the statute or statutes that it has construed to reach that result.
B. 	Commerce Must Explain Adequately the Application of Its NME Policy to
Jilin After Selecting Jilin for Examination Pursuant to the Mandatory
Respondent Exception
Pursuant to statute, Commerce is directed to determine an individual rate for each known
exporter or producer of subject merchandise. See 19 U.S.C. § 1677f-1(c). This is the “general
rule” of § 1677f-1(c)(1), and it is subject only to the Mandatory Respondent Exception in
subsection (c)(2), which implicitly provides for a calculation of the all-others rate based upon the
weighted-average rates of mandatory respondents. 	The statute clearly directs that Commerce
must determine an individual rate for respondents chosen for individual examination as
mandatory respondents, because they are “known” exporters or producers. See id.
18 	See, e.g., Jinko Solar Co. v. United States, 961 F.3d 1177, 1183 (Fed. Cir. 2020)
(“[I]f ‘the intent of Congress is clear, that is the end of the matter;’ . . . but if the statute is
ambiguous or does not include the aspect at issue, then the agency’s interpretation must be
accepted unless it is ‘procedurally defective, arbitrary or capricious in substance, or manifestly
contrary to the statute.’”) (first quoting Chevron, 467 U.S. at 842; and then citing Ningbo Dafa
Chem. Fiber Co. v. United States, 580 F.3d 1247, 1253 (Fed. Cir. 2009)) (applying Chevron to
antidumping determinations).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 29 of 35

Court No. 18-00191 	Page 30
Here, Commerce did not first determine which entities were eligible for a separate rate
and which were not, prior to deciding which entities would be designated as mandatory
respondents. 	Instead, having designated Jilin a mandatory respondent and thus a “known
exporter,” Commerce placed itself under the general obligation to determine for Jilin an
“individual weighted average dumping margin.” See id. The Department states that it need not
comply with the statute, because of Jilin’s failure to demonstrate independence from state control.
Beyond concluding that the NME Policy should be applied, Commerce does little to explain why
it did not determine Jilin’s individual rate.19 It bears repeating that it appears Commerce had all
of the information it needed to determine an individual weighted-average dumping margin for
Jilin. 	Moreover, because of the importance of the Mandatory Respondent Exception’s goal of
determining an accurate all-others rate by means of a weighted-average calculation of the rates
19 	The China-wide rate that Commerce applied to Jilin was based on an adverse
inference. 	See, e.g., Baroque Timber, 38 CIT at ___, 971 F. Supp. 2d at 1338-39 (“Commerce
selected . . . the revised AFA rate for the [China]-wide entity.”). The application of an AFA rate
to a fully cooperative respondent is unanticipated by the statute. The statute only provides for the
use of AFA when there is (1) a gap in the record, and (2) uncooperative behavior by respondent.
That is, if information necessary to the record is “missing,” then Commerce is permitted to base
an individual weighted-average dumping margin on the use of “facts otherwise available” (19
U.S.C. § 1677e(a)(1)), and indeed, if circumstances permit, with resort to AFA (19 U.S.C.
§ 1677e(b)). No such circumstances are apparent on the record before the court. Commerce did
not make a finding, supported by record evidence, that “necessary information,” within the
meaning of 19 U.S.C. § 1677e(a), was unavailable on the record with respect to Jilin’s
information. 	Cf. China Mfrs. All., 41 CIT at ___, 205 F. Supp. 3d at 1338 (“The authority
Congress provided in 19 U.S.C. § 1677e does not extend to the use of an adverse inference against
Double Coin, a fully cooperative int[e]rested party that Commerce examined individually in the
review and for which Commerce calculated (but declined to apply) an individual weighted
average dumping margin based on information it found to be sufficient for that purpose.”); but
see Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1313 n.6 (Fed. Cir. 2017)
(noting, in dicta, that China Manufacturers Alliance “does not properly apply our precedent
upholding Commerce’s use of the [China]-wide entity rate for companies that fail to rebut the
presumption of government control and is incompatible with the underlying NME presumption,”
although China Manufacturers Alliance had yet to be finally decided by this Court).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 30 of 35

Court No. 18-00191 	Page 31
of the two mandatory respondents selected for this review, compliance with the statute assumes
even greater importance.
It also bears repeating that the purpose of the NME Policy is to encourage compliant
participation in a proceeding, not only on the part of an individually-examined respondent, but
also by the nonmarket economy country government. The Policy does this by shifting the burden
to respondents to demonstrate their independence from the government. Here, there is nowhere
on the record any indication that Jilin, in its efforts to demonstrate its independence from state
control and provide the factual information necessary to determine its individual rate, was not
entirely cooperative with Commerce’s requests for information. Thus, Jilin was compliant. Also
absent from the record is any evidence that China was sent a questionnaire, or that Commerce
sought information from Chinese officials in any other way.20 When asked to cooperate, Jilin
20 	The Department does say that it “matters” that no request to review the China-
wide entity was submitted here. Commerce apparently believes that circumstance absolves it of
any duty to inquire further as to the status of the NME Entity. It is unclear, however, why Jilin
should be charged with shouldering the burden of asking that the China-wide entity be reviewed.
The evidence indicates that Jilin did not expect to be included in the entity. It never was before.
And it presented evidence, once again, that it was not. 	Commerce itself proceeded along that
same assumption when it selected Jilin as a mandatory respondent. Therefore, Jilin had no reason
to request review of the China-wide entity.
Moreover, this Court has found that a mandatory respondent cannot ask for a review of
the “NME-wide entity.” 	The relevant regulation on the subject confers no such right. 	See
Guizhou Tyre, 44 CIT at ___, 469 F. Supp. 3d at 1355-57. 	The regulation indicates that only
Commerce, or possibly the foreign government impacted, could request a review of the NME
Entity. 	See 19 C.F.R. § 351.221(b) (“on the Secretary’s own initiative”); see also id.
§ 351.213(b)(1) (“or an interested party described in section 771(9)(B) of the Act (foreign
government)”). Respondents or importers may only request administrative review with respect
to their own products, exports, or imports. 	See id. § 351.213(b)(2), (b)(3). 	Furthermore, the
evidence of record indicates that the composition of—or even the actual existence of—the so-
called “China-wide entity” was a complete “unknown” at the beginning of the review. It is, after
all, a legal fiction constructed for convenience. It is, therefore, difficult to see how Jilin could be
required to “request” a review of an indefinite entity that has yet to be “clarified” at the start of
an administrative proceeding. 	Cf. id. § 351.213(b)(1) (emphasis added) (“specified individual
exporters or producers covered by an order”).
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 31 of 35

Court No. 18-00191 	Page 32
did. The government of China was never asked to “cooperate,” so it could not have failed to do
so. In other words, “compliance” is not an issue in this case.
Both Commerce and the Federal Circuit have been mindful that the need to encourage
compliance can be combined with the primary goal of determining an accurate rate and thus avoid
rates that serve to punish a respondent. 	See Albemarle, 821 F.3d at 1356 (citation omitted)
(administrative reviews should “be as accurate and current as possible”).
An examination of the record further reveals that it is difficult to figure out just what
entities were under review (being examined) as well as the statutory authority to apply to Jilin the
China-wide rate. See Final IDM at 10 (“Because [Jilin] has failed to rebut the presumption of
government control, it is subject to the same rate applicable to all members of the China-wide
entity that have not proven their independence from the state.”). The question of what entities
are actually under review is not one that is presenting itself here for the first time. This Court has
questioned what type of rate Jilin’s NME Entity rate actually is, given that the rates specified in
the antidumping statute for an “individually investigated” respondent and for the all-others rate
for those respondents “not individually investigated” are the only two rates explicitly authorized
by the statute. See, e.g., Thuan An, 42 CIT at ___, 348 F. Supp. 3d at 1351 (“That courts have
permitted Commerce to presume state control in an NME country does not address the problem
of Commerce lacking statutory authority for a country-wide rate that is neither an individually
investigated rate nor an all-others rate. Although Defendant-Intervenors argued initially that the
country-wide rate in this case was indeed an individual rate, [Commerce] expressly denied that
the Vietnam-wide rate in this case is an individual rate.”); UCF Am. Inc. v. United States, 20 CIT
320, 325-26, 919 F. Supp. 435, 440 (1996) (“Other than pointing to its current rationale for its
NME policy, including an example of application of a single country-wide ‘all others’ rate where
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 32 of 35

Court No. 18-00191 	Page 33
no company proved autonomy from the central government, Commerce has pointed to no
authority for establishing a ‘PRC rate’ in lieu of an ‘all others’ rate.”). Commerce has not stated
the statutory authority for assigning Jilin the China-wide rate of 25.62 percent. 21
Commerce has provided no reasoned explanation for its application of the NME Policy to
mandatory respondent Jilin, nor has it provided a reasoned explanation for failing to calculate
Jilin’s rate as directed by statute and in light of its particular role in the Mandatory Respondent
Exception. 	Therefore, on remand the Department shall calculate an antidumping duty rate for
Jilin and use it in its construction of the all-others rate or provide a reasonable explanation for
why it need not. Should the Department adopt the latter course, Commerce’s explanation shall
ensure that it has permitted Jilin, in advance of draft remand results and in accordance with 19
C.F.R. § 351.301(c)(4), to submit written argument with respect to the Department’s inclusion of
the Aluminum Foil proceeding on the record of this review, and shall take into consideration all
relevant arguments presented by Jilin to Commerce on the issue of state control.
21 	Diamond Sawblades and Thuan An do not direct a different result. See Diamond
Sawblades, 866 F.3d at 1304; Thuan An Production Trading & Service Co. v. United States, 43
CIT __, 396 F. Supp. 3d 1310 (2019). In Diamond Sawblades, the parties did not raise, and the
Court did not decide, whether the statute authorizes Commerce to apply a China-wide rate. See
Diamond Sawblades, 866 F.3d at 1310 n.4 (“During oral argument, ATM clarified that it does
not challenge Commerce’s ability to apply a PRC-wide entity rate under the statutory
framework.”). In Thuan An, this Court rejected, as contrary to the statute, Commerce’s
determination that it had the authority to establish “a third type of rate, i.e., an NME-entity rate
or country-wide rate,” pursuant to 19 C.F.R. § 351.107(d), which Commerce viewed as neither
“an individual rate [nor] an all-others rate.” Thuan An, 43 CIT at __, 396 F. Supp. 3d at 1314
(citing 19 C.F.R. § 351.107(d)). After remand, the Court found sufficient, for purposes of
compliance with its remand order, Commerce’s “acknowledgement” in its redetermination, based
on the facts of that case, that “the NME-entity rate in the underlying investigation was an
individually investigated rate.” Id. Neither case resolved the questions presented here, i.e., just
what entities were under review (being examined) as well as the statutory authority to apply to
Jilin the China-wide rate.
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 33 of 35

Court No. 18-00191 	Page 34
In addition, should it endeavor to explain why it need not calculate an individual rate for
Jilin, Commerce’s explanation shall cover: (1) the role played by the Mandatory Respondent
Exception and how the Mandatory Respondent Exception’s purpose of establishing an accurate
rate for Jilin and an accurate all-others rate is advanced by not calculating an individual rate for
Jilin; (2) the purpose of the NME Policy and how the Policy’s purpose is achieved by the
application of the NME Policy to Jilin; (3) the statutory and/or regulatory basis for a request for
review of the China-wide entity by Jilin; (4) the interplay of the NME Policy, the Mandatory
Respondent Exception, and the purpose of the statute to determine accurate rates not only for Jilin
but for all unexamined respondents subjected to the all-others rate; (5) because of its importance
to determining whether the law directs Commerce to calculate an individual rate for Jilin, a
specific statement as to whether and how Jilin was under review individually or as part of the
China-wide entity; (6) an explanation as to why 19 C.F.R. § 351.212(c)(1) does not operate to
continue Jilin’s cash deposit rate, as the record seems to indicate that Commerce did not,
apparently and/or completely, “review” Jilin; (7) the specific statutes the Department is
construing with respect to both the NME Policy and the Mandatory Respondent Exception and
any legal theories upon which it relies if it seeks deference for the construction of the statute;
(8) an explanation of the Department’s use of the various phrases “export functions,” “export
activities,” and “company’s operations,” in particular a statement of the extent to which they differ
or are synonymous, and a statement of the extent to which analysis of “export functions” is
required as part of its de facto control analysis regarding Jilin, how that consideration affects its
remand results, and how the phrase figures in this case; and (9) if Commerce should assign the
AFA-inclusive China-wide rate to Jilin, then explain, with specificity, why it is reasonable to
apply such an AFA-inclusive rate when Jilin has, apparently, been fully compliant in responding
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 34 of 35

Court No. 18-00191 	Page 35
to Commerce’s requests for information and has not otherwise hindered or impeded the
proceeding. While Commerce may, on remand, cite to any cases it wishes, these cases cannot
take the place of reasoned explanations.
CONCLUSION and ORDER
In view of and in addition to the foregoing, Jilin’s motion for judgment on the agency
record is hereby granted, and this case is remanded to Commerce. On remand, it is hereby:
ORDERED that Commerce shall reconsider the Final Results as directed by this Opinion
and Order and submit a new determination upon remand (“Remand Redetermination”) that
complies with this Opinion and Order, is supported by substantial evidence, and is otherwise in
accordance with law; and it is further
ORDERED that the Remand Redetermination shall be due ninety (90) days following the
date of this Opinion and Order; any comments to the remand results shall be due thirty (30) days
following the filing of the remand results; and any responses to those comments shall be filed
fifteen (15) days following the filing of the comments.
/s/ Richard K. Eaton
Richard K. Eaton, Judge
Dated:
New York, New York
$SULO
Case 1:18-cv-00191-RKE Document 47 Filed 04/29/21 Page 35 of 35