Shandong Huarong Mach. Imp. & Exp. Co. v. United States , 33 Ct. Int'l Trade 810 ( 2009 )


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  •                               Slip Op. 09-64
    UNITED STATES COURT OF INTERNATIONAL TRADE
    :
    SHANDONG MACHINERY IMPORT &         :
    EXPORT COMPANY                      :
    :
    Plaintiff,         :
    : Before: Richard K. Eaton, Judge
    v.                       :
    : Court No. 07–00355
    UNITED STATES,                      :
    : Public Version
    Defendant,         :
    :
    and                            :
    :
    AMES TRUE TEMPER and                :
    COUNCIL TOOL COMPANY, INC.,         :
    :
    Def.-Ints.         :
    :
    OPINION AND ORDER
    [Department of Commerce’s final results sustained in part and
    remanded]
    Dated: June 24, 2009
    Hume & Associates LLC (Robert T. Hume) for plaintiff.
    Tony West, Assistant Attorney General; Jeanne E. Davidson,
    Director; Patricia M. McCarthy, Assistant Director, Civil
    Division, Commercial Litigation Branch, United States Department
    of Justice (Courtney E. Sheehan); Office of Chief Counsel for
    Import Administration, United States Department of Commerce
    (Nithya Nagarajan), of counsel, for defendant.
    Wiley Rein LLP (Eileen P. Bradner, Timothy C. Brightbill and
    Maureen E. Thorson), for defendant-intervenor Ames True Temper.
    Kelley Drye & Warren, LLP (Eric McClafferty), for defendant-
    intervenor Council Tool Company, Inc.
    Court No. 07-00355                                            Page 2
    Eaton, Judge:   This action is before the court on plaintiff
    Shandong Machinery Import & Export Company’s (“SMC”) USCIT R.
    56.2 motion for judgment upon the agency record.    See Pl.’s Mem.
    Supp. Mot. J. Agency R. (“Pl.’s Mem.”).   Defendant United States
    together with defendant-intervenors Ames True Temper and the
    Council Tool Company, Inc. oppose this motion.     See Def.’s Resp.
    to Pl.’s Mot. for J. Agency R. (“Def.’s Resp.”); Def.-Int.’s Br.
    in Resp. to Pl.’s Mot. for J. Agency R.; Resp. Br. of Def.-Int.
    Council Tool Company, Inc.
    By its motion, SMC challenges the final results of the
    United States Department of Commerce’s (“Commerce” or the
    “Department”) fifteenth administrative review of antidumping duty
    orders covering heavy forged hand tools (“HFHTs”) from the
    People’s Republic of China (“PRC”) for the period of review
    beginning on February 1, 2005, and ending on January 30, 2006
    (“POR”).   See HFHTs, Finished or Unfinished, With or Without
    Handles, From the PRC, 
    72 Fed. Reg. 51,787
     (Dep’t of Commerce
    Sept. 11, 2007) (final results) and the accompanying Issues and
    Decision Memorandum (Dep’t of Commerce Sept. 4, 2007) (“Issues &
    Dec. Mem.”) (collectively, “Final   Results”).   United States
    imports of HFHTs are subject to individual antidumping duty
    orders covering separate categories of goods, including those at
    issue here:   bars/wedges; hammers/sledges; and axes/adzes.      
    Id.
    In the Final Results, Commerce found that plaintiff failed
    Court No. 07-00355                                          Page 3
    to rebut the non-market economy (“NME”) presumption of government
    control.1   As a result, Commerce applied country-wide antidumping
    duty rates (“PRC-wide rates”) to SMC’s exports.   See Issues &
    Dec. Mem. at Comment 1; HFHTs, Finished or Unfinished, With or
    Without Handles, From the PRC, 
    72 Fed. Reg. 10,492
     (Dep’t of
    Commerce Mar. 8, 2007) (“Prelim. Results”).   The PRC-wide rates
    assigned by Commerce were: 139.31 percent for bars/wedges, 45.42
    percent for hammers/sledges, and 189.37 percent for axes/adzes.
    The court has jurisdiction pursuant to 
    28 U.S.C. § 1581
    (c)
    and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006).   For the following
    reasons, the court sustains Commerce’s Final Results in part and
    remands the rate for hammers/sledges to Commerce for further
    findings consistent with this opinion.
    1
    A non-market economy includes “any foreign country that
    the administering authority [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) (2006);
    Shandong Huarong Gen. Group Corp. v. United States, 
    28 CIT 1624
    ,
    1625 n.1, Slip Op. 04-117 at 3 n.1 (2004) (not reported in the
    Federal Supplement).
    “Any determination that a foreign country is a nonmarket
    economy country shall remain in effect until revoked by the
    administering authority.” 
    19 U.S.C. § 1677
    (18)(C)(i) (2006).
    The PRC has been determined to be an NME country. The Department
    has treated the PRC as a non-market economy country in all past
    antidumping investigations. Zhejiang Native Produce & Animal By-
    Products Imp. and Exp. Corp. v. United States, 
    27 CIT 1827
    , 1834
    n.14, Slip Op. 03-151 at 12 n.14 (2003) (not reported in the
    Federal Supplement) (citations omitted).
    Court No. 07-00355                                           Page 4
    STANDARD OF REVIEW
    When reviewing Commerce’s final antidumping determinations,
    the court “shall hold unlawful any determination, finding, or
    conclusion found . . . to be unsupported by substantial evidence
    on the record, or otherwise not in accordance with law . . . .”
    19 U.S.C. § 1516a(b)(1)(B)(i) (2006).
    DISCUSSION
    I.   PRC-Wide Rate
    A.   Legal Framework
    When conducting an investigation or review of an NME
    country, Commerce employs a presumption of state control.     See
    Coal. for the Pres. of Am. Brake Drum & Rotor Aftermarket Mfrs.
    v. United States, 
    23 CIT 88
    , 100, 
    44 F. Supp. 2d 229
    , 242 (1999).
    To rebut this presumption and thus qualify for a separate rate,
    an exporter must “affirmatively demonstrate its entitlement to a
    separate, company-specific margin . . . .”     Sigma Corp. v. United
    States, 
    117 F.3d 1401
    , 1405 (Fed. Cir. 1997) (“Sigma”) (citation
    and quotation omitted).
    To establish that a firm is sufficiently independent from
    government control to be entitled to a separate rate, the
    Department requires respondents to demonstrate the absence of
    both de jure and de facto government control over export
    activities.   See Peer Bearing Co.-Changshan v. United States, 32
    Court No. 07-00355                                              Page 5
    CIT __, __, 
    587 F. Supp. 2d 1319
    , 1324 (2008) (“Peer Bearing”);
    see also Sparklers from the PRC, 
    56 Fed. Reg. 20,588
    , 20,589
    (Dep’t of Commerce May 6, 1991) (final determination of sales at
    less than fair value).
    Absence of de jure government control can be
    demonstrated by reference to legislation and
    other governmental measures that decentralize
    control. Absence of de facto government
    control can be established by evidence that
    each exporter sets its prices independently
    of the government and of other exporters, and
    that each exporter keeps the proceeds of its
    sales.
    Sigma, 
    117 F.3d at 1405
     (citations omitted).
    When a company fails to rebut the presumption of state
    control, Commerce employs that presumption and applies the PRC-
    wide rate to its products.     See 
    Id. at 1405
    .
    B.    Application of PRC-Wide Rate to SMC
    In the Final Results, Commerce stated that SMC failed to
    “supply the Department with all the information and documentation
    necessary for it to demonstrate that it is eligible for separate
    rates.”     Issues & Dec. Mem. at Comment 1.   Moreover, it found
    that
    [d]espite being given several opportunities,
    SMC failed to provide complete or consistent
    responses to our questions, rendering it
    impossible to adequately determine whether or
    not SMC’s business operations are free from
    de jure or de facto government control. We
    are unable to definitively determine who owns
    Court No. 07-00355                                            Page 6
    SMC, who controls SMC, and the nature of
    SMC’s relationship with the national,
    provincial, and local governments.2
    Issues & Dec. Mem. at Comment 1.    Accordingly, Commerce concluded
    that plaintiff failed to rebut the presumption of government
    control and failed to establish its eligibility for a rate
    separate from the PRC-wide rate.
    By its motion, plaintiff contends that Commerce wrongfully
    applied the PRC-wide rates to its sales of bars/wedges,
    hammers/sledges and axes/adzes because it demonstrated absence of
    government control and qualified for separate rates.    Pl.’s Mem.
    12-16.   Plaintiff makes several arguments to support its
    position.    Specifically, the company states that the PRC Foreign
    Trade Law, PRC Whole People Law, its business license and its
    export license demonstrate de jure independence from state
    control.    Pl.’s Mem. 13-14.   Moreover, plaintiff asserts that it
    demonstrated de facto independence, particularly by producing
    proof that the Shandong Foreign Trade Economic Committee had no
    role in its export activities and that the Committee has never
    provided any capital to plaintiff.    Pl.’s Mem. 16.
    In response, Commerce first argues that it was unable to
    determine who owned or controlled plaintiff based on plaintiff’s
    2
    Here, because the court finds that SMC has failed to
    demonstrate that it is free of national governmental control, it
    makes no finding with respect to provincial or local governmental
    control.
    Court No. 07-00355                                             Page 7
    responses to a series of questionnaires.    Def.’s Resp. 15.
    Commerce states that, in its original questionnaire, it asked
    plaintiff to “describe and explain” who owned the company,
    including the “full name and address of the individual(s),
    corporation(s), or entities that own your company.”    SMC’s Resp.
    to Commerce’s Section A Questionnaire dated May 11, 2006
    (“Original Section A Resp.”) 8.   Plaintiff responded, “SMC is
    owned by its shareholders[,]” but failed to include the full name
    or address of any of these “shareholders.”    Original Section A
    Resp. 8.
    Dissatisfied with plaintiff’s response, Commerce then issued
    its first supplemental questionnaire.    See SMC’s Resp. to
    Commerce’s Supp. Sections A, C, and D Questionnaires dated May
    23, 2006 (“First Supp. Resp.”) 3-4.   The first supplemental
    questionnaire asked whether any other person or party had ever
    owned plaintiff, whether plaintiff traded publicly, how many
    shareholders plaintiff had, who held more than 1.99 percent of
    plaintiff’s shares, and asked for a description of the classes of
    plaintiff’s shares together with a    “detailed text explanation of
    the ownership of SMC.”   First Supp. Resp. 3-4.   Plaintiff
    responded to the first supplemental questionnaire by stating that
    it was “all-people owned, which means each member of SMC is
    responsible for his or her gain and loss.    SMC is not a limited
    liability company.   To the extent that shareholders refer to the
    Court No. 07-00355                                             Page 8
    employees at SMC; SMC currently has [a certain number of]
    employee ‘shareholders.’”   First Supp. Resp. 4.   Plaintiff also
    stated that it was independent from the central and provincial
    governments, a “private enterprise,” “not publicly traded,” and
    that it did “not have classes of shares.”   First Supp. Resp. 3-4.
    Commerce remained unsatisfied with plaintiff’s questionnaire
    responses and issued a second supplemental questionnaire.     In
    this second supplemental questionnaire, Commerce asked plaintiff
    whether “all-people owned” meant that “SMC [was] owned by all the
    people of the [PRC].”   SMC’s Resp. to Commerce’s Supp. Sections
    A, C, and D Questionnaires dated Jan. 22, 2007 (“Second Supp.
    Resp.”) 1.   Plaintiff responded that “state-owned” and “all
    people-owned” had “the same meaning and [were] interchangeable.”
    Second Supp. Resp. 1.   With its response to the second
    supplemental questionnaire, plaintiff also included a letter from
    the Shandong Province Foreign Economic Trade Cooperation Bureau
    (“SPFETCB”) “certifying the ownership status of SMC.”     Second
    Supp. Resp. 1.   The letter states, “Shandong Machinery Import &
    Export Group Corp. is [an] all-people owned enterprise, the
    description shown on its business license is state-owned
    enterprise, all-people owned and state-owned enterprises are the
    same in term[s] of character.”   Second Supp. Resp. at Ex. 1.
    In the second supplemental questionnaire, Commerce also
    asked plaintiff to “[p]rovide a detailed text explanation of the
    Court No. 07-00355                                            Page 9
    difference between the terms ‘all-people owned’ and ‘whole people
    owned,’ as cited in” plaintiff’s response to the first
    supplemental questionnaire.   Second Supp. Resp. 1.   Plaintiff
    responded by referencing Article 6 of the PRC Constitution and
    stating that “all-people owned” meant “collective ownership by
    the working people.” Second Supp. Resp. 1.
    According to Article 6 of the Constitution
    Law of the PRC, “the basis of the socialist
    economic system of the PRC is the socialist
    public ownership of the means of production,
    namely, ownership by the whole people and
    collective ownership by the working people.”
    The terms “state-owned” enterprise, “all
    people-owned” enterprise, and “whole people-
    owned” enterprise have the same meaning and
    are interchangeable. In order to clarify
    SMC’s ownership status as an all people-owned
    enterprise, Shandong Province Foreign
    Economic Trade Cooperation Bureau has
    provided an official letter certifying the
    ownership status of SMC.
    Second Supp. Resp. 2.
    In addition, in the second supplemental questionnaire,
    Commerce asked plaintiff to explain material on certain websites
    that suggested SMC might be a “nationalized business,” “state-
    owned business” or “state-owned enterprise.” Second Supp. Resp.
    2, 4-5.   Rather than explaining the website material, plaintiff
    responded by referencing Article 6 of the PRC Constitution and
    the SPFETCB letter.   Second Supp. Resp. 2, 4-5.   Additionally, in
    the second supplemental questionnaire, Commerce asked plaintiff
    to explain the word “private” in its first supplemental
    Court No. 07-00355                                               Page 10
    questionnaire response that it was an “‘all-people owned’ private
    enterprise.”    Second Supp. Resp. 3.   Plaintiff responded, “SMC
    regrets the use of the word ‘private’ in its prior response and
    hereby retracts the use of this word.     SMC merely meant to convey
    that SMC is non-public.”    Second Supp. Resp. 3.
    Further, in the second supplemental questionnaire, Commerce
    again asked plaintiff to “[l]ist and provide the address of any
    and every entity or person who holds more than 1.99 percent of
    the shares of SMC.” Second Supp. Resp. 3.     In its response,
    plaintiff referred to “Shandong Foreign Trade Economic
    Committee.”    Second Supp. Resp. 4.3   Plaintiff attempted to
    qualify its response by stating that the Committee “merely
    provides a supervisory function to SMC.”     Second Supp. Resp. 4.
    As the foregoing demonstrates, plaintiff failed to rebut the
    presumption of de jure government control, i.e., it has not
    demonstrated that it is not owned or controlled by the PRC.
    Indeed, rather than demonstrating the absence of state control,
    plaintiff’s answers suggest that the company was, in fact, under
    state control.    This being the case, because both de jure and de
    facto independence must be shown in order to qualify for a
    separate rate, the court need not address plaintiff’s claims of
    3
    Plaintiff stated that “Shandong Foreign Trade Economic
    Committee . . . is SMC’s investor and the department in charge.”
    Second Supp. Resp. 4.
    Court No. 07-00355                                              Page 11
    de facto independence from governmental control.     See Peer
    Bearing, 32 CIT at __, 
    587 F. Supp. 2d at 1324
    .
    Because SMC has failed to rebut the presumption that it is
    controlled by the Chinese government it is not entitled to a
    separate rate.   See Shandong Huarong Gen. Group Corp. v. United
    States, 
    27 CIT 1568
    , 1591, Slip Op. 03-135 at 37 (2003) (not
    reported in the Federal Supplement).   As a result, Commerce may
    apply the PRC-wide rate to that company’s exports.     
    Id. at 38
    .
    II.   Selection of PRC-Wide Rates for Bars/Wedges,
    Hammers/Sledges, and Axes/Adzes
    A.   Legal Framework
    In seeking a PRC-wide rate based on AFA, the Department may
    use information derived from the petition, a final determination
    in the investigation, any prior administrative review, or any
    other information placed on the record.   See 19 U.S.C.
    § 1677e(b); Statement of Admin. Action accompanying the Uruguay
    Round Agreements Act, H.R. Rep. 103-316 at 870, reprinted in 1994
    U.S.C.C.A.N. 4040, 4199 (stating that secondary information is
    “information derived from the petition that gave rise to the
    investigation or review, the final determination concerning the
    subject merchandise, or any previous review under [
    19 U.S.C. § 1675
    ] concerning the subject merchandise”).   Where, as here,
    Commerce relies on secondary information such as calculated rates
    Court No. 07-00355                                            Page 12
    from previous reviews, rather than information obtained in the
    course of a current investigation or review, the Department must
    “to the extent practicable, corroborate that information from
    independent sources that are reasonably at [its] disposal.”    19
    U.S.C. § 1677e(c); see 
    19 C.F.R. § 351.308
    (d).    To corroborate
    secondary information, Commerce must “examine whether the
    secondary information to be used has probative value.”     See 
    19 C.F.R. § 351.308
    (d).
    Probative value means that the rate must be both a) reliable
    and b) relevant.     See Ferro Union, Inc. v. United States, 
    23 CIT 178
    , 202, 
    44 F. Supp. 2d 1310
    , 1333 (1999) (“Ferro Union”).
    Commerce must do more than assume “any prior calculated margin
    for the industry is reliable and relevant.”    Id. at 204, 44 F.
    Supp. 2d at 1334.    Indeed, “[i]n order to comply with the statute
    and the [Statement of Administrative Action]’s statement that
    corroborated information is probative information, Commerce must
    assure itself that the margin it applies is relevant, and not
    outdated, or lacking a rational relationship to [the
    respondent].”   Id. at 205, 44 F. Supp. 2d at 1335.
    Importantly, in the NME situation, there is no requirement
    that the rate based on AFA relate specifically to the individual
    company.   See Peer Bearing Co., 32 CIT at __, 
    587 F. Supp. 2d at 1327
    .   Rather, “the rate must be corroborated according to its
    reliability and relevance to the countrywide entity as a whole.”
    Court No. 07-00355                                              Page 13
    
    Id.
     at __, 
    587 F. Supp. 2d at 1327
     (citation omitted).     Thus, the
    rates Commerce selects in this case must be reliable and relevant
    to the PRC-wide entity,4 not specifically to SMC.
    B.   Corroboration of Secondary Information
    Commerce argues that the secondary information it used is
    reliable and relevant such that it has probative value.    It
    states:
    [T]o corroborate secondary information, the
    Department will, to the extent practicable,
    examine the reliability and relevance of the
    information used. However, unlike other
    types of information . . . there are no
    independent sources for calculated dumping
    margins. The only sources for calculated
    margins are administrative determinations.
    These rates are applied to the PRC-wide
    entity, i.e., only to companies not eligible
    for a separate rate with regard to the
    individual class or kind of merchandise. No
    information has been presented in the current
    review that calls into question the
    reliability of the information used for these
    AFA rates. Thus, the Department continues to
    find that the information is reliable.
    Issues & Dec. Mem. at Comment 3.   Plaintiff challenges the
    reliability and relevance of the rates.   Pl.’s Mem. 23.
    Specifically, plaintiff argues that the Department “did not
    utilize any measure to verify independently the reliability of
    4
    In antidumping proceedings, the PRC-wide entity and all
    of its components are considered to be a single respondent. See
    Sigma, 
    117 F.3d at 1405-07
    .
    Court No. 07-00355                                               Page 14
    the Bars/Wedges or Hammers/Sledges rates” and that the
    “Department failed to verify and corroborate the calculated PRC-
    wide and AFA rate” applied to axes/adzes.       Pl.’s Mem. 31.
    The court finds that substantial evidence supports the
    conclusion that two of the selected AFA rates, i.e., 139.31
    percent for bars/wedges and 189.37 percent for axes/adzes, were
    properly corroborated as being reliable and, because of the
    application of AFA, are relevant to the PRC as a whole.       As an
    initial matter, the court finds reasonable the Department’s
    decision to base the PRC-wide rates on AFA.       Each of the four
    respondents were found to have been subject to an AFA rate and
    nothing has been placed on the record to indicate that the
    country-wide entity would not similarly be found to be subject to
    AFA.       See AFA and Corroboration Memo. for Company Rates dated
    Feb. 28, 2007 (“AFA and Corroboration Memo.”) at 12.
    With respect to the rates themselves, when faced with
    determining a country-wide rate based on what it calls “total
    AFA,”5 Commerce faces a difficult task.      Unlike rates that are
    5
    Commerce references “total adverse facts available,”
    which is not referenced in either the statute or the agency’s
    regulations. The phrase can be understood, within the context of
    this case, as referring to Commerce’s application of adverse
    facts available not only to the facts pertaining to specific
    sales for which information was not provided, but to the facts
    respecting all of respondents’ sales encompassed by the relevant
    antidumping duty order. See Shandong Huarong Mach. Co. v. United
    States, 
    30 CIT 1269
    , 1271 n.2, 
    435 F. Supp. 2d 1261
    , 1265 n.2
    (2006), (citing Gerber Food (Yunnan) Co., Ltd. v. United States,
    Court No. 07-00355                                             Page 15
    calculated using responses to questionnaires, Commerce cannot
    calculate an AFA rate for the PRC as a whole, because there are
    no questionnaire responses from the PRC itself on which to rely.
    What the record does contain is the questionnaire responses from
    SMC and the other respondents in this review.   However, because
    Commerce found all of the respondents to be subject to the
    application of total AFA, the responses themselves were deemed
    non-probative.   Indeed, for Commerce, the only value of the
    responses is to confirm that this country-wide rate should be
    based on AFA.    It is worth noting that the decision to apply AFA
    to the country-wide entity has not been contested by any party.
    Thus, the decision to apply an AFA rate to the PRC as a whole is
    reasonable and is sustained.
    To determine an AFA rate, Commerce turned to its often used
    methodology of choosing the highest rate from the original
    investigation or from prior reviews.    See AFA and Corroboration
    Memo.; Shanghai Taoen Int’l Trading Co. v. United States, 
    29 CIT 189
    , 
    360 F. Supp. 2d 1339
     (2005) (upholding the AFA rate as
    application of the highest available dumping margin from a
    different respondent in a prior administrative review); Kompass
    Food Trading Int’l v. United States, 
    24 CIT 678
    , 683 Slip Op. 00-
    29 CIT __, __, 
    387 F. Supp. 2d 1270
    , 1285 n.3 (2005)).
    Court No. 07-00355                                            Page 16
    90 (2000) (not reported in the Federal Supplement) (affirming the
    Department’s use of the highest available dumping margin from a
    different, fully cooperative respondent in the less than fair
    value investigation).
    For bars/wedges, Commerce assigned the 139.31 percent rate
    as the PRC-wide margin.    Def.’s Mem. 28; Issues & Dec. Mem. at
    Comment 3.   This is the rate calculated using verified
    information provided by Tianjin Machinery Import & Export
    Corporation, another respondent, in the eighth administrative
    review of the bars/wedges order.    See HFHTs, Finished or
    Unfinished, With or Without Handles, From the PRC, 
    71 Fed. Reg. 54,269
     at Comment 2 (Dep’t of Commerce Sept. 14, 2006)
    (final results).   Commerce recently found this AFA and PRC-wide
    rate to be sufficiently corroborated for use in the fourteenth
    administrative review.    Def.’s Mem. 28; Issues & Dec. Mem. at
    Comment 3; HFHTs, Finished or Unfinished, With or Without
    Handles, From the PRC, 
    71 Fed. Reg. 54,269
     at Comment 2 (Dep’t of
    Commerce Sept. 14, 2006) (final results).
    For axes/adzes, Commerce used the calculated 189.37 percent
    rate for Shandong Huarong Machinery Co., Ltd., based on its
    verified sales and production data from the fourteenth
    administrative review.    See Def.’s Mem. 28; Issues & Dec. Mem. at
    Comment 2;   HFHTs, Finished or Unfinished, With or Without
    Handles, From the PRC, 
    71 Fed. Reg. 54,269
     at Comment 9 (Dep’t of
    Court No. 07-00355                                             Page 17
    Commerce Sept. 14, 2006) (final results).   Commerce then applied
    this rate as AFA for the PRC-wide entity here.    See HFHTs,
    Finished or Unfinished, With or Without Handles, From the PRC, 
    71 Fed. Reg. 54,269
     at Comment 9 (Dep’t of Commerce Sept. 14, 2006)
    (final results).
    As noted, Commerce is required to corroborate secondary
    information “to the extent practicable.”    19 U.S.C. § 1677e(c).
    Here, because the 139.31 percent rate for bars/wedges and the
    189.37 percent rate for axes/adzes: (1) are from earlier reviews
    of the same categories of merchandise; (2) are based on verified
    information taken from similar companies; (3) have not been found
    either unsupported by substantial evidence nor contrary to law by
    any court; and (4) with the exception of plaintiff’s
    subsidization argument, have not been challenged by any record
    evidence,6 Commerce has satisfied its corroboration requirement.
    The court thus upholds Commerce’s determination that the 139.31
    percent rate for bars/wedges and 189.37 percent rate for
    6
    While it might seem a heavy burden on the plaintiff to
    anticipate the use of these rates for assignment pursuant to AFA,
    and to interpose objections to them, these rates have been used
    as AFA consistently in past reviews. See, e.g., HFHTs, Finished
    or Unfinished, With or Without Handles, From the PRC, 
    71 Fed. Reg. 54,269
     (Dep’t of Commerce Sept. 14, 2006) (final results)
    (fourteenth review); HFHTs, Finished or Unfinished, With or
    Without Handles, From the PRC, 
    70 Fed. Reg. 54,897
     (Dep’t of
    Commerce Sept. 19, 2005) (final results)(thirteenth review);
    HFHTs, Finished or Unfinished, With or Without Handles, From the
    PRC, 
    69 Fed. Reg. 55,581
     (Dep’t of Commerce Sept. 15, 2004)
    (final results) (twelfth review).
    Court No. 07-00355                                              Page 18
    axes/adzes are reliable.
    In addition to its contentions as to the reliability and
    relevance of the assigned rates, plaintiff insists that the MUTT®
    scraper should be excluded from the calculated PRC-wide and AFA
    rate for axes/adzes.    Pl.’s Mem. 30-31.   That is, “[i]n effect,
    the . . . calculated rate [from the fourteenth review] for
    Axes/Adzes is based solely on the MUTT® scraper submitted to the
    Department for a scope review.”    Pl.’s Mem. 30.   Plaintiff
    contends that there is “compelling evidence” that the
    manufacturing process used in creating the MUTT® scraper should
    preclude it from inclusion in the scope of the HFHTs category.
    Pl.’s Mem. 30.   According to plaintiff, if the MUTT® scraper
    sales were eliminated from consideration, then Commerce would be
    required to find a lower rate for axes/adzes.    However, as
    plaintiff also acknowledges, this Court has previously held that
    the MUTT is, in fact, subject to the terms of the axes/adzes
    order.   Pl.’s Mem. 30; see Tianjin Mach. Imp. & Exp. Corp. v.
    United States, 31 CIT __, __, Slip Op. 07-131 at 17 n.4 (Aug. 28,
    2007) (not reported in the Federal Supplement) (“Tianjin”).       That
    being the case, there is no reason to exclude a rate based on
    MUTT® exports.
    With respect to hammers/sledges, the court reaches a
    different conclusion.    For this merchandise Commerce used the
    45.42 percent rate calculated as the best information available
    Court No. 07-00355                                          Page 19
    (“BIA”)7 rate during a 1991 less than fair value (“LTFV”)
    investigation of the China National Machinery Import & Export
    Corporation.   See Def.’s Mem. 28; Issues & Dec. Mem. at Comment
    3; HFHTs, Finished or Unfinished, With or Without Handles, From
    the PRC, 
    56 Fed. Reg. 241
     (Dep’t of Commerce Jan. 3, 1991) (final
    results).   Commerce most recently used this rate as the AFA and
    PRC-wide rate during the fourteenth administrative review. See
    Def.’s Mem. 28; Issues & Dec. Mem. at Comment 3; HFHTs, Finished
    or Unfinished, With or Without Handles, From the PRC, 
    71 Fed. Reg. 54,269
     (Dep’t of Commerce Sept. 14, 2006) (final results).
    The rate, however, was not corroborated.   Rather, the rate,
    based on BIA, was calculated in the 1991 LTFV investigation of
    the China National Machinery Import & Export Corporation.   See
    HFHTs, Finished or Unfinished, With or Without Handles, From the
    PRC, 
    56 Fed. Reg. 241
     (Dep’t of Commerce Jan. 3, 1991) (final
    results) (“Because we have rejected CMC’s questionnaire response
    and are using best information available for our determinations,
    7
    BIA is the predecessor to AFA. In the Statement of
    Administrative Action of the Uruguay Round Agreements Act of
    1994, Pub.L. No. 103-465, 
    108 Stat. 4809
     (1994), Congress
    explained that the Uruguay Round amended the prior law, which
    “mandate[d] use of the best information available (commonly
    referred to as BIA) if a person refuse[d] or [was] unable to
    produce information in a timely manner or in the form required.”
    H.R. Doc. No. 103-316 (1994) at 868, reprinted in 1994
    U.S.C.C.A.N. 4040, 4198. Shandong Huarong Mach. Co. v. United
    States, 
    30 CIT 1269
    , 1282 n.9, 
    435 F. Supp. 2d 1261
    , 1274 n.9
    (2006).
    Court No. 07-00355                                              Page 20
    we did not verify CMC’s questionnaire response.”).     Rather than
    using verified information, the Department used information
    submitted by the petitioner.    Specifically, Commerce calculated
    an average of the margins contained in the petition for each
    class or kind of merchandise, as adjusted for calculation errors
    in the petition.     See 
    Id.
     at Comment 4; HFHTs, Finished or
    Unfinished, With or Without Handles, From the PRC, 
    55 Fed. Reg. 42,420
     (Dep’t of Commerce Oct. 19, 1990) (preliminary
    determination).    Therefore, Commerce took no steps to corroborate
    the information during the LTFV investigation.     That being the
    case, Commerce failed to comply with the corroboration
    requirement found in 19 U.S.C. § 1677e(c) and 
    19 C.F.R. § 351.308
    (d).   Consequently, the 45.42 percent rate is not
    reliable, and the court directs Commerce, on remand, to assign a
    different rate to hammers/sledges that has been “corroborated
    according to its reliability and relevance to the country-wide
    entity as a whole.” Peer Bearing, 31 CIT at __, 
    587 F. Supp. 2d at 1327
     (citation omitted).
    C.   The Bars/Wedges Rate Is Not Punitive
    Plaintiff also contends that the 139.31 percent rate for
    bars/wedges is punitive.    Pl.’s Mem. 27.   In making its case,
    plaintiff argues that this Court invalidated the 139.31 percent
    rate for bars and wedges as punitive and aberrational in Shandong
    Court No. 07-00355                                           Page 21
    Huarong Gen. Corp. v. United States, 
    29 CIT 1227
    , Slip Op. 05-129
    (2005) (not published in the Federal Supplement) (“Huarong III”).
    In fact, in Huarong III, this Court remanded Commerce’s use of
    the rate not because the rate was unreliable or irrelevant to the
    PRC-wide entity, but because the rate lacked specific reliability
    and relevance to the individual companies that were parties to
    that case.   Huarong III, 29 CIT at 1332, Slip Op. 05-129 at 12.
    The Huarong III plaintiffs qualified for separate rates.     Huarong
    III, 29 CIT at 1228, Slip Op. 05-129 at 3.   Here, SMC failed to
    qualify for a separate rate and Commerce has no obligation to
    corroborate the rate as to SMC itself.   See Peer Bearing, 31 CIT
    at __, 
    587 F. Supp. 2d at 1327
    .   Thus, Huarong III does not
    support plaintiff’s contention.   Moreover, plaintiff cites to no
    evidence on the record relating to what a calculated rate for the
    PRC-wide entity might be.   As such, plaintiff has made no
    convincing argument that the assigned rate is punitive.
    D.   There Is No Evidence of Subsidization in the AFA/PRC-
    Wide Rates
    Lastly, plaintiff contends that the Department must
    recalculate the margins from prior segments of these proceedings
    in order to corroborate the AFA/PRC-wide rates.   Specifically,
    plaintiff contends that “[t]he Department previously determined
    Indian export data cannot be used for surrogate values because of
    Court No. 07-00355                                            Page 22
    Indian subsidies and that South Korea, Thailand, and Indonesia
    maintain broadly available, non-industry specific export
    subsidies that may benefit all exporters to all export markets.”
    Pl.’s Mem. 23-24 (citation omitted).   Accordingly, plaintiff
    argues, the Department must exclude: “1) any Indian imports of
    steel from the United Kingdom, Belgium, Canada, or Germany in
    calculating the AFA/PRC-wide rate for Hammers/Sledges and 2) the
    Indian imports of steel from the United Kingdom, Belgium, and
    Germany in calculating the AFA/PRC-wide rate for Axes/Adzes.”
    Pl.’s Mem. 24.   In addition, plaintiff argues that the Department
    must also exclude United States data because the United States
    subsidizes exports.   Pl.’s Mem. 25.
    Despite plaintiff’s contentions that the AFA/PRC-wide rates
    applied to sales of bars/wedges and hammers/sledges are distorted
    by subsidization, its claim must be rejected for two reasons:
    first, because it is well settled that the “record for judicial
    review should ordinarily not contain material from separate
    investigations, including records of separate administrative
    reviews arising out of the same antidumping duty order, as is the
    case here,”(Sanyo Elec. Co. v. United States, 
    23 CIT 355
    , 361, 
    86 F. Supp. 2d 1232
    , 1239 (1999) (citations and quotation omitted));
    and second, because this Court has continually rejected this
    argument where, as here, plaintiffs have “provided no evidence to
    support their assertion” that “the surrogate value Commerce
    Court No. 07-00355                                           Page 23
    employed was distorted by subsidies.”     See Tianjin, 31 CIT at __,
    Slip Op. 07-131 at 40 (“While plaintiffs insist that the
    surrogate value Commerce employed was distorted by subsidies,
    they have provided no evidence to support their assertion.    Thus,
    the court cannot credit plaintiffs’ subsidy objection.”).
    Accordingly, plaintiffs’ assertion that the objected to values
    were subsidized must be rejected.
    CONCLUSION
    For the foregoing reasons, the court sustains Commerce’s
    final determination in part and remands for further findings,
    consistent with this opinion, with respect to the calculated
    45.42 percent rate for hammers/sledges.    The remand results shall
    be due on November 2, 2009; comments to the remand results shall
    be due on December 7, 2009; and replies to such comments shall be
    due on December 21, 2009.
    /s/ Richard K.Eaton
    Richard K. Eaton
    Dated:    June 24, 2009
    New York, New York