Ad Hoc Shrimp Trade Action Comm. v. United States , 925 F. Supp. 2d 1315 ( 2013 )

Slip Op. 13 - 93
UNITED STATES COURT OF INTERNATIONAL TRADE
AD HOC SHRIMP TRADE ACTION
COMMITTEE,
Plaintiff,
v.
Before: Donald C. Pogue,
UNITED STATES, Chief Judge
Defendant, Court No. 11-00335
and
HILLTOP INTERNATIONAL and OCEAN
DUKE CORP.,
Defendant-Intervenors.
OPINION
[final results of redetermination on remand affirmed in part and
remanded in part]
Dated: July 23, 2013
Andrew W. Kentz, Jordan C. Kahn, Nathaniel Maandig
Rickard and Nathan W. Cunningham, Picard Kentz & Rowe LLP, of
Washington, DC, for the Plaintiff.
Joshua E. Kurland, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for the Defendant. With him on the brief
were Stuart Delery, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Patricia M. McCarthy, Assistant
Director. Of counsel on the brief was Melissa M. Brewer,
Attorney, Office of the Chief Counsel for Import Administration,
U.S. Department of Commerce, of Washington, DC.
Mark E. Pardo and Andrew T. Schutz, Grunfeld,
Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington,
DC, for the Defendant-Intervenors.
Court No. 11-00335 Page 2
Pogue, Chief Judge: This action arises from the fifth
administrative review of the antidumping duty order covering
certain frozen warmwater shrimp from the People’s Republic of
China (“China” or the “PRC”).1 In prior proceedings, the court
remanded certain aspects of the agency decision in this review
for further consideration.2 While remand was pending, the United
States Department of Commerce (“Commerce”), by motion, sought
permission to reopen the administrative record to consider new
evidence suggesting that the antidumping duty assessment rate
calculated in this review for respondent Hilltop International
(“Hilltop”) – a Defendant-Intervenor in this action – may have
been based on information that was false or incomplete.3 Because
Commerce’s request to expand the scope of remand was based on a
substantial and legitimate concern, the motion was granted.4
1
See Certain Frozen Warmwater Shrimp from the People’s Republic
of China, 76 Fed. Reg. 51,940 (Dep’t Commerce Aug. 19, 2011)
(final results and partial rescission of antidumping duty
administrative review) (“Final Results”) and accompanying Issues
& Decision Mem., A-570-893, ARP 09-10 (Aug. 12, 2011).
2
Ad Hoc Shrimp Trade Action Comm. v. United States, __ CIT __,
882 F. Supp. 2d 1366 (2012).
3
Ad Hoc Shrimp Trade Action Comm. v. United States, __ CIT __,
882 F. Supp. 2d 1377, 1379 (2013).
4
Id. at 1381-82 (relying on SKF USA Inc. v. United States,
254 F.3d 1022, 1029 (Fed. Cir. 2001); Shakeproof Assembly
Components Div. of Ill. Tool Works, Inc. v. United States,
29 CIT 1516, 1522-26, 412 F. Supp. 2d 1330, 1336-39 (2005)).
Court No. 11-00335 Page 3
Upon consideration of the new evidence, Commerce
concluded that Hilltop had significantly impeded this proceeding
by submitting information containing material misrepresentations
and inaccuracies.5 Moreover, Commerce determined that the nature
of Hilltop’s misrepresentations and the circumstances of their
eventual disclosure “call[ed] into question Hilltop’s ownership
structure as reported in [this review], and, consequently, its
eligibility for a separate rate [from the PRC-wide entity].”6
Accordingly, because the record contained no reliable evidence
to rebut the presumption of government control attaching to
Hilltop as an exporter of subject merchandise from China,7
Commerce determined that Hilltop failed to demonstrate
eligibility for a rate separate from the PRC-wide entity, and
therefore assigned to Hilltop the antidumping duty assessment
5
Final Results of Redetermination Pursuant to Court Remand,
A-570-893, ARP 09-10 (Apr. 1, 2013), ECF No. 74 (“Remand
Results”) at 17.
6
Id. at 24.
7
See Transcom, Inc. v. United States, 294 F.3d 1371, 1373 (Fed.
Cir. 2002) (explaining that Commerce treats exporters “from
countries with nonmarket economies (‘NMEs’) such as China” as
“subject to a single, countrywide antidumping duty rate unless
they [can] demonstrate legal, financial, and economic
independence from the Chinese government,” and noting that the
Court of Appeals for the Federal Circuit has “upheld the
application of this ‘NME presumption’”) (citing Sigma Corp. v.
United States, 117 F.3d 1401 (Fed. Cir. 1997)).
Court No. 11-00335 Page 4
rate applied to that countrywide entity.8 Hilltop now challenges
Commerce’s redetermination on remand as not supported by
substantial evidence.9
The court has jurisdiction pursuant to Section
516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(iii) (2006),10 and 28 U.S.C. § 1581(c)
(2006).
For the reasons set forth below, Commerce’s
determination to apply the PRC-wide antidumping duty assessment
rate to Hilltop is sustained. However, Commerce’s choice of an
appropriate assessment rate for the PRC-wide entity (including
Hilltop) is remanded for further consideration and/or additional
explanation concerning the chosen rate’s compliance with the
antidumping statute’s corroboration requirement.11
BACKGROUND
On remand, Commerce accepted into the record of this
(fifth) review evidence submitted by Plaintiff Ad Hoc Shrimp
8
Remand Results at 15.
9
See Def.-Intervenors’ Comments in Opp’n to Final Remand
Results, ECF No. 76 (“Hilltop’s Br.”).
10
Further citations to the Tariff Act of 1930, as amended, are
to the relevant provisions of Title 19 of the U.S. Code,
2006 edition.
11
See 19 U.S.C. § 1677e(c).
Court No. 11-00335 Page 5
Trade Action Committee (“AHSTAC”) – a petitioner for the
underlying antidumping duty order – in the course of the
subsequent (sixth) review of the order.12 This new evidence
showed that, contrary to Hilltop’s representations in this
review, Hilltop was affiliated with an undisclosed Cambodian
shrimp exporter during the relevant time period.13 Commerce
12
Remand Results at 2, 5 (citing Placing Public Documents on the
Record of the Fifth Administrative Review, A-570-893, ARP 09-10
(Feb. 14, 2013), Remand Admin. R. Pub. Docs. 1-38 (“Docs. from
AR6”), [AHSTAC’s] Comments on the Dep’t’s Preliminary
Determination to Grant Hilltop’s Request for Company-Specific
Revocation Pursuant to 19 C.F.R. 351.222(b)(2) & Comments in
Anticipation of Hilltop’s Forthcoming Verification, A-570-893,
ARP 10-11 (Mar. 12, 2012), reproduced in Hilltop’s Br. con.
app., ECF No. 79-1, at ex. 6). All relevant portions of the
administrative record relied on in this opinion are reproduced
within the public and confidential appendices to the parties’
court filings, ECF Nos. 79-80, 94-95. Hereinafter, all
citations to documents from the sixth review that have been
placed on the record of this (fifth) review include the label
Docs. from AR6.
13
Compare Resp. of Hilltop Int’l & Affiliates to Antidumping
Questionnaire Section A, A-570-893, ARP 10-11 (June 15, 2010),
Admin. R. Con. Doc. 6 [Pub. Doc. 36], reproduced in Def.’s Resp.
Comments Regarding Remand Results (“Def.’s Resp.”) con. app.,
ECF No. 94-5, at tab 19 (“Hilltop’s AR5 Sec. A Resp.”) at 4-5
(representing that Exhibits A-2 and A-3 to Hilltop’s AR5 Section
A Response contain an exhaustive list of Hilltop’s
affiliations), and id. at Exs. A-2 & A-3 (making no mention of
Ocean King (Cambodia) Co., Ltd. (“Ocean King”)), with Docs. from
AR6, Hilltop’s 7th Supp. Questionnaire Resp., A-570-893,
ARP 10-11 (June 27, 2012), reproduced in Def.’s Resp. con. app.
at tab 24 (“Hilltop’s AR6 7th Supp. Questionnaire Resp.”) at 2
(acknowledging that “an affiliation within the statutory
definition of 19 U.S.C. § 1677(33) existed between the Hilltop
Group and Ocean King until September 28, 2010”). See Final
Results, 76 Fed. Reg. at 51,940 (noting that the period of
(footnote continued)
Court No. 11-00335 Page 6
concluded that the circumstances of Hilltop’s eventual admission
to this previously undisclosed affiliation impeached Hilltop’s
credibility with regard to its remaining representations in this
review. See Remand Results at 16 (“Because Hilltop submitted
material misrepresentations with regard to its affiliations, and
certified the accuracy of such false information, we find that
we cannot rely on any of the information submitted by Hilltop in
this review.”). Specifically, Commerce credited evidence that
Hilltop did not disclose this affiliation until faced with clear
evidence thereof14; that Hilltop failed to provide a satisfactory
explanation for its omissions and misrepresentations in
reporting its corporate structure – claiming only that the
misrepresentations “may have been in error . . . for whatever
reason”15; and that Hilltop continues to withhold information
review for this proceeding was February 1, 2009, through January
31, 2010).
14
See Docs. from AR6, Hilltop’s AR6 7th Supp. Questionnaire
Resp. at 2 (admitting that this affiliation was not disclosed
until Commerce placed on record public registration documents
for Ocean King showing affiliation with Hilltop).
15
See Remand Results at 19 (quoting Docs. from AR6, Hilltop-
Specific Issues Rebuttal Br., A-570-893, ARP 10-11 (July 23,
2012), reproduced in Def.’s Resp. pub. app., ECF No. 95-4, at
tab 18 (“Hilltop’s AR6 Rebuttal Br.”) at 9).
Court No. 11-00335 Page 7
that Commerce requested regarding potential additional
undisclosed affiliates.16
Commerce’s determination that Hilltop is not a
reliable source of complete and accurate information implicated
Hilltop’s representations in this review that neither it nor any
of its PRC affiliates with potential for price manipulation were
under the control of the Chinese government. See Hilltop’s AR5
Sec. A Resp. at 3-5; Remand Results at 15. Because Commerce’s
decision to assign to Hilltop a separate rate from the PRC-wide
entity in this review had been based on these representations,17
which Commerce now found to be unreliable,18 the agency
determined that the basis for Hilltop’s separate rate status had
been invalidated. Remand Results at 15. Finding no valid
evidence to rebut the presumption of government control applied
to exporters of subject merchandise from China,19 Commerce
decided to no longer treat Hilltop as separate from the PRC-wide
entity. Id. Accordingly, Commerce assigned to Hilltop the
16
See id. at 21 n.83, 23.
17
Certain Frozen Warmwater Shrimp from the People’s Republic of
China, 76 Fed. Reg. 8338, 8340 (Dep’t Commerce Feb. 14, 2011)
(preliminary results and preliminary partial rescission of fifth
antidumping duty administrative review) (“Preliminary Results”)
(unchanged in the Final Results, 76 Fed. Reg. at 51,942).
18
Remand Results at 15.
19
See supra note 7.
Court No. 11-00335 Page 8
112.81 percent antidumping duty assessment rate applied to the
PRC-wide entity in this review. Id. at 2.
Hilltop challenges Commerce’s redetermination on
remand, arguing that it should be assessed an antidumping duty
rate based at least in part on its own information. Hilltop’s
Br. at 3-24. In the alternative, Hilltop challenges the rate
assessed for the PRC-wide entity (including Hilltop) in this
review as not supported by substantial evidence. Id. at 24-37.
STANDARD OF REVIEW
The court will sustain Commerce’s redetermination on
remand so long as it is supported by substantial evidence and is
otherwise in accordance with law. See 19 U.S.C.
§ 1516a(b)(1)(B)(i); Pakfood Pub. Co. v. United States,
__ CIT __, 753 F. Supp. 2d 1334, 1341 (2011). Substantial
evidence refers to “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion,” SKF USA, Inc.
v. United States, 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938) (defining
“substantial evidence”)), and the substantial evidence standard
of review can be roughly translated to mean “is the
determination unreasonable?” Nippon Steel Corp. v. United
States, 458 F.3d 1345, 1351 (Fed. Cir. 2006) (internal quotation
and alteration marks and citation omitted).
Court No. 11-00335 Page 9
DISCUSSION
A. Commerce’s Decision to Deny Hilltop Separate Rate Status
in This Review Is Sustained.
The first question before the court is whether
Commerce’s decision to deny Hilltop separate rate status in this
review is supported by substantial evidence. See Remand Results
at 2 (finding that “Hilltop has failed to rebut the presumption
that it is part of the [PRC]-wide entity”); Hilltop Br. at 18-24
(arguing that Commerce’s decision to treat Hilltop as part of
the PRC-wide entity is not supported by substantial evidence).
For the reasons below, Commerce’s decision to apply the PRC-wide
antidumping duty assessment rate to Hilltop is supported by
substantial evidence and is therefore sustained.
When dealing with merchandise from China, which
Commerce treats as a nonmarket economy (“NME”),20 Commerce
20
A “nonmarket economy” is defined as “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). “Because it deems China to be a
nonmarket economy country, Commerce generally considers
information on sales in China and financial information obtained
from Chinese producers to be unreliable for determining, under
19 U.S.C. § 1677b(a), the normal value of the subject
merchandise.” Shanghai Foreign Trade Enters. Co. v. United
States, 28 CIT 480, 481, 318 F. Supp. 2d 1339, 1341 (2004).
See also 19 U.S.C. § 1677b(c) (providing special rules governing
Commerce’s calculation of normal value for merchandise from
nonmarket economy countries); Preliminary Results, 76 Fed. Reg.
at 8340 (“In every case conducted by [Commerce] involving the
PRC, the PRC has been treated as an NME country. In accordance
(footnote continued)
Court No. 11-00335 Page 10
“presumes that all companies within [China] are subject to
governmental control and should be assigned a single antidumping
duty rate unless an exporter demonstrates the absence of both de
jure and de facto governmental control over its export
activities” and thus obtains “separate rate status”.21 Where
with [19 U.S.C. § 1677(18)(C)(i)], any determination that a
foreign country is an NME country shall remain in effect until
revoked by [Commerce]. None of the parties to this proceeding
has contested such treatment. Accordingly, we calculated
[normal value] in accordance with [19 U.S.C. § 1677b(c)], which
applies to NME countries.”) (additional citation omitted)
(unchanged in the Final Results or Remand Results).
21
Import Administration, U.S. Dep’t Commerce, Separate-Rates
Practice & Application of Combination Rates in Antidumping
Investigations Involving Non-Market Economy Countries, Policy
Bulletin No. 05.1 (Apr. 5, 2005) (“ITA Policy Bulletin 05.1”)
at 1 (citation omitted); Preliminary Results, 76 Fed. Reg. at
8340. Generally, Commerce evaluates “whether a firm is
sufficiently independent from governmental control in its export
activities to be eligible for separate rate status” on the basis
of three criteria for demonstrating the absence of de jure
government control and four criteria for demonstrating the
absence of de facto government control. ITA Policy Bulletin 05.1
at 2. The de jure freedom from government control criteria are
“1) an absence of restrictive stipulations associated with an
individual exporter’s business and export licenses; 2) any
legislative enactments decentralizing control of companies; and
3) any other formal measures by the government decentralizing
control of companies.” Id. The de facto freedom from government
control criteria are “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.” Id.
Court No. 11-00335 Page 11
record evidence supports a respondent’s eligibility for separate
rate status, Commerce must treat the respondent as separate from
the countrywide entity unless the agency makes a specific
finding, supported by substantial evidence, that the evidence
regarding separate rate eligibility is deficient or otherwise
unreliable. See Jiangsu Changbao Steel Tube Co. v. United
States, __ CIT __, 884 F. Supp. 2d 1295, 1309-10 (2012).22
Hilltop’s separate rate status in this review was
based on representations contained in its responses to
Commerce’s information requests. Preliminary Results,
76 Fed. Reg. at 8340-41 (unchanged in the Final Results,
76 Fed. Reg. at 51,942). Because Hilltop “reported that it is a
Hong Kong based exporter of subject merchandise,” Commerce
concluded that “a separate rate analysis [was] not necessary to
determine whether [Hilltop] is independent from government
control.” Id. at 8341 (citations omitted).23 Although Hilltop
22
(discussing Gerber Food (Yunnan) Co. v. United States, 29 CIT
753, 387 F. Supp. 2d 1270 (2005); Shandong Huarong Gen. Grp.
Corp. v. United States, 27 CIT 1568 (2003) (not reported in the
Federal Supplement); Foshan Shunde Yongjian Housewares &
Hardware Co. v. United States, No. 10-00059, 2011 WL 4829947(CIT Oct. 12, 2011); Since Hardware (Guangzhou) Co. v. United
States, No. 09-00123, 2010 WL 3982277 (CIT Sept. 27, 2010)).
23
See id. at 8340 (“[I]f [Commerce] determines that a company is
wholly foreign-owned or located in a market economy, then a
separate rate analysis is not necessary to determine whether it
is independent from government control.”) (citing Petroleum Wax
Candles from the People’s Republic of China, 72 Fed. Reg.
(footnote continued)
Court No. 11-00335 Page 12
had disclosed a number of affiliations with companies located in
China that were at least partially owned by Chinese persons or
entities, it represented that “[t]here is no control over any of
the Hilltop Group companies by any local or national government
entity.” Hilltop’s AR5 Sec. A Resp. at 3-4. Based on this
information, Commerce determined that “there is no PRC ownership
of Hilltop” and, notwithstanding Hilltop’s affiliation with
Chinese companies, the record presented “no evidence indicating
that [any] of these companies are under the control of the PRC.”
Preliminary Results, 76 Fed. Reg. at 8341 (unchanged in the
Final Results, 76 Fed. Reg. at 51,942).
As discussed above, however, on remand Commerce
determined that Hilltop provided false and incomplete
information in this review regarding its corporate structure
and, given the nature and timing of Hilltop’s omissions and
misrepresentations in this regard, Commerce decided that none of
Hilltop’s submissions, including the statements used to support
52,355, 52,356 (Dep’t Commerce Sept. 13, 2007) (final results of
antidumping duty administrative review)); see also, e.g., Wooden
Bedroom Furniture from the People’s Republic of China, 69 Fed.
Reg. 35,312, 35,320 (Dep’t Commerce June 24, 2004) (notice of
preliminary determination of sales at less than fair value and
postponement of final determination) (“It is [Commerce]’s policy
to treat Hong Kong companies as market-economy companies.”)
(citing Application of U.S. Antidumping and Countervailing Duty
Laws to Hong Kong, 62 Fed. Reg. 42,965 (Dep’t Commerce Aug. 11,
1997) (explaining that “Hong Kong [is] considered a separate
Customs territory within the PRC” subsequent to the PRC’s
resumed exercise of sovereignty over its territory)).
Court No. 11-00335 Page 13
Hilltop’s separate rate status, could be relied on to provide
accurate information. See Remand Results at 2, 15. This
conclusion “was based on the finding that Hilltop had a
Cambodian affiliate, Ocean King, from [the first period of
administrative review of this antidumping duty order] through
most of [the sixth period of review], which Hilltop repeatedly
failed to disclose to [Commerce].” Id. at 6.
Commerce’s finding that Hilltop repeatedly withheld
and misrepresented material information regarding its
affiliation with Ocean King is supported by a reasonable reading
of the record here. Specifically, record evidence shows that,
although Hilltop’s general manager and part owner was a board
member and 35 percent shareholder in Ocean King during the
period of review,24 Hilltop nevertheless misrepresented to
Commerce that “[n]one of the Hilltop Group companies or their
24
See Remand Results at 8 (“[Commerce] released public
registration documents for Ocean King that identified To Kam
Keung, Hilltop’s general manager and part owner, as a board
member and 35 percent shareholder beginning in July 2005 and
ending in September 2010.”) (citing Docs. from AR6, Public
Registration Docs. for Ocean King (Cambodia) Co., Ltd.,
A-570-893, ARP 10-11 (June 19, 2012), reproduced in Def.’s Resp.
pub. app. at tab 17); Docs. from AR6, Hilltop’s AR6 7th Supp.
Questionnaire Resp. at 2 (acknowledging that “an affiliation
within the statutory definition of 19 U.S.C. § 1677(33) existed
between the Hilltop Group and Ocean King until September 28,
2010”); Final Results, 76 Fed. Reg. at 51,940 (noting that the
period of review for this proceeding was February 1, 2009,
through January 31, 2010).
Court No. 11-00335 Page 14
individual owners own 5 percent or more in stock in any third
parties,”25 and that none of Hilltop’s managers “held positions
with any other firm, government entity, or industry organization
during the [period of review].”26 The evidence also shows that
Hilltop subsequently denied and concealed its affiliation with
and investment in Ocean King until confronted with public
registration documents contradicting its misrepresentations.27
This is sufficient to reasonably support Commerce’s conclusion
that Hilltop withheld information requested of it in this review
25
See Remand Results at 12 (quoting Ex. A-2 to Hilltop’s AR5
Sec. A Resp.).
26
See id. at 13 n.65 (quoting Hilltop Int’l & Affiliates Supp.
Section A Questionnaire Resp., A-570-893, ARP 09-10
(July 29, 2010), Admin. R. Con. Doc. 12 [Pub. Doc. 58],
reproduced in Def.’s Resp. con. app. at tab 20, at 6).
27
Compare Docs. from AR6, Hilltop’s Resp. to CBP Import Data,
A-570-893, ARP 10-11 (May 24, 2012), reproduced in Def.’s Resp.
con. app. at tab 23, at 2 n.1 (claiming that Hilltop is not
affiliated with any of the Cambodian shrimp manufacturers
identified in Docs. from AR6, Customs Data of U.S. Imports of
Certain Frozen Warmwater Shrimp from Cambodia, A-570-893,
ARP 10-11 (May 17, 2012), reproduced in Def.’s Resp. con. app.
at tab 25, which included Ocean King), and Docs. from AR6,
Hilltop’s Reply to Pet’rs’ Resp. to CBP Import Data, A-570-893,
ARP 10-11 (May 31, 2012), reproduced in Def.’s Resp. con. app.
at tab 23, at 6 (“Hilltop is not affiliated with Ocean King.
. . . Hilltop confirms that neither the company, nor its owners
or officers, invested any funds in Ocean King.”), with Docs.
from AR6, Hilltop’s AR6 7th Supp. Questionnaire Resp. at 2
(admitting to Hilltop’s affiliation with Ocean King for the
first time in response to Commerce’s request to reconcile
Hilltop’s prior representations with the public registration
documents for Ocean King).
Court No. 11-00335 Page 15
and significantly impeded this proceeding by submitting
information containing material misrepresentations and
inaccuracies. See Remand Results at 15, 17.
When a respondent fails to comply with Commerce’s
requests by withholding or failing to timely provide requested
information, submitting information that cannot be verified, or
otherwise significantly impeding an antidumping proceeding,
Commerce may disregard all or part of the deficient submission
if the respondent fails to timely and adequately remedy or
explain the deficiency after receiving notice from the agency.
19 U.S.C. at §§ 1677e(a)(2), 1677m(d).28 Here Commerce
28
Where the deficiency identified in a respondent’s submissions
affects an isolated issue or data set, Commerce uses facts
otherwise available solely to fill the evidentiary gap, while
continuing to rely on the remainder of the respondent’s non-
deficient submissions. E.g., Am. Silicon Techs. v. United
States, 24 CIT 612, 620 n.6, 110 F. Supp. 2d 992, 999 n.6 (2000)
(citing Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Rep. No. 103-826 (1994)
(“SAA”) at 656, 869). Where, however, the deficiency affects
information that is “core, not tangential, and there is little
room for substitution of partial facts,” Commerce may disregard
the totality of the respondent’s submitted information and reach
its determination based on “total facts available.” Shanghai
Taoen Int’l Trading Co. v. United States, 29 CIT 189, 199 n.13,
360 F. Supp. 2d 1339, 1348 n.13 (2005). Where resort to the use
of facts otherwise available is warranted, Commerce may employ
an adverse inference when selecting among the facts available if
it further determines that the respondent failed to cooperate by
not acting to the best of its ability to comply with Commerce’s
requests for information. 19 U.S.C. § 1677e(b). But “[a]lthough
separate determinations are required for application of facts
otherwise available under § 1677e(a), and adverse inferences
under § 1677e(b), both standards are met where a respondent
(footnote continued)
Court No. 11-00335 Page 16
determined that Hilltop’s conduct implicated the overall
credibility of its representations in this review.29 In
particular, Commerce concluded that the credibility of Hilltop’s
statements regarding its affiliations, corporate structure, and
ownership – which had formed the basis for Hilltop’s separate
rate status in this review – was undermined by Hilltop’s
withholding of critical information and repeated
misrepresentation of the scope of its affiliates. Remand Results
at 14-15. Specifically, Commerce could no longer rely on
Hilltop’s declaration that none of the Chinese companies with
which it is affiliated – all of which possess “a significant
potential for manipulation of [the] price or production [of
subject merchandise]”30 – was controlled by the PRC.31
purposefully withholds, and provides misleading, information.”
Shanghai Taoen, 29 CIT at 195, 360 F. Supp. 2d at 1345.
29
See Remand Results at 17; cf. Changbao, __ CIT at __,
884 F. Supp. 2d at 1306 (“It is reasonable for Commerce to infer
that a respondent who admits to having intentionally deceived
Commerce officials, and does so only after Commerce itself
supplies contradictory evidence, exhibits behavior suggestive of
a general willingness and ability to deceive and cover up the
deception until exposure becomes absolutely necessary.”);
Shanghai Taoen, 29 CIT at 199 n.13, 360 F. Supp. 2d at 1348 n.13
(explaining that a respondent’s intentional deception of
Commerce may reasonably implicate the overall credibility of
that respondent).
30
Preliminary Results, 76 Fed. Reg. at 8339.
31
See Hilltop’s AR5 Sec. A Resp. at 3-4; Remand Results at 15,
24 (“Hilltop’s refusal in AR6 . . . to disclose its full
(footnote continued)
Court No. 11-00335 Page 17
Although Hilltop was afforded an opportunity to
rehabilitate its impeached credibility by providing a reasonable
explanation for its non-disclosure and subsequent denial of any
affiliation with Ocean King, the evidence also supports
Commerce’s conclusion that Hilltop’s explanation was
unpersuasive.32 Far from providing a reasonable explanation,
Hilltop admitted only what was unequivocally evidenced by the
new documents,33 trivialized its prior misrepresentation as
having been in error “for whatever reason,”34 and continued to
universe of affiliated companies and provide information
regarding its affiliations with other persons/entities calls
into question Hilltop’s ownership structure as reported in [this
review], and, consequently, its eligibility for a separate rate
in this review.”), 30 (“[B]ecause the disclosure of Hilltop’s
affiliation with Ocean King . . . reveals that substantial
portions of Hilltop’s Section A response contain material
misrepresentations with regard to Hilltop’s corporate structure
and affiliations, Hilltop’s entire Section A response, which
details its eligibility for a separate rate and was submitted in
lieu of a separate-rate application, is now fatally undermined
and unusable for any purposes.”) (citation omitted).
32
See Remand Results at 32 (“Based on the record as a whole, we
determine that Hilltop has failed to present any evidence or
argument that explains its failure to disclose its dealings with
Ocean King or its trading activity with persons/entities
involved in its Cambodian enterprise.”).
33
Docs. from AR6, Hilltop’s AR6 7th Supp. Questionnaire Resp.
at 2 (admitting to Hilltop’s affiliation with Ocean King for the
first time in response to Commerce’s request to reconcile
Hilltop’s prior representations with the public registration
documents for Ocean King).
34
Docs. from AR6, Hilltop’s AR6 Rebuttal Br. at 9.
Court No. 11-00335 Page 18
evade Commerce’s requests for information regarding possible
additional undisclosed affiliates.35 Commerce inferred that
Hilltop’s failure to disclose its affiliation with Ocean King
until faced with undeniable evidence thereof rendered its
representations regarding lack of PRC control over its Chinese
affiliates untrustworthy. Remand Results at 15, 21. As this
Court has previously held, “the inference that a respondent’s
failure to disclose willful deception until faced with
contradictory evidence implicates the reliability of that
respondent’s remaining representations is reasonable.” Changbao,
__ CIT at __, 884 F. Supp. 2d at 1306 (citing Shanghai Taoen,
29 CIT at 199 n.13, 360 F. Supp. 2d at 1348 n.13). Here the
reasonableness of this inference is bolstered by evidence that
Hilltop may also have additional undisclosed affiliates, whose
roles in the production and pricing of subject merchandise
Hilltop continues to deny.36
35
See Remand Results at 21 (noting Hilltop’s “potential
affiliations with additional entities/persons”) (citing Docs.
from AR6, Hilltop 6th Supp. Questionnaire, A-570-893, ARP 10-11
(June 1, 2012), reproduced in Def.’s Resp. pub. app. at tab 17,
at questions 5d, 5e, and 9a-c (requesting information regarding
Hilltop’s affiliation with certain entities/persons referenced
in the record evidence) and noting that “Hilltop refused to
respond to these questions” in its subsequent responses).
36
See supra note 35.
Court No. 11-00335 Page 19
Under these circumstances, Commerce reasonably
determined to disregard the totality of Hilltop’s
representations in this review – including those previously used
to support Hilltop’s separate rate status – as inherently
unreliable because Hilltop’s conduct “raises questions regarding
what other information is missing that could be relevant to
[Commerce]’s proceeding.” Remand Results at 23; see 19 U.S.C.
at §§ 1677e(a)(2), 1677m(d). Hilltop’s unexplained
contradictions in representing its corporate structure in this
review concern information that is core, not tangential, to
Commerce’s analysis because it goes to the heart of Hilltop’s
corporate ownership and control.37 And as Hilltop continued to
misrepresent its corporate structure – including by explicitly
denying any affiliation with Ocean King or other undisclosed
entities – until forced to reconcile its misrepresentations with
contradictory evidence,38 Commerce reasonably decided that
Hilltop’s remaining representations regarding its structure and
ownership – particularly those concerning the role of PRC
37
See Remand Results at 30 (“Hilltop’s failure to disclose the
affiliation [with Ocean King] goes to the heart of its Section A
questionnaire response and the information that [Commerce]
relies on to make separate-rate status determinations.”);
cf. Shanghai Taoen, 29 CIT at 199 n.13, 360 F. Supp. 2d
at 1348 n.13.
38
See supra note 27.
Court No. 11-00335 Page 20
government control in its pricing decisions – may be similarly
incomplete and inaccurate. See Remand Results at 15, 23.
Based on these findings, Commerce’s conclusion that
Hilltop’s representations regarding its corporate structure,
affiliations, and government control are not reliably accurate
and complete is reasonable. Accordingly, because the record
contains no other reliable information to rebut the presumption
of government control,39 Commerce’s determination that Hilltop
failed to demonstrate eligibility for a separate rate from the
39
While Hilltop emphasizes the record evidence that it is
registered in Hong Kong, see Hilltop’s Br. at 18-24 (relying on
Exs. A-5 (Hilltop’s Hong Kong Business License) & A-6 (Hilltop’s
Hong Kong Business Registration Form) to Hilltop’s AR5 Sec. A
Resp.), Hilltop’s registration in Hong Kong does not address the
potential for government control through Hilltop’s disclosed and
possibly additional undisclosed PRC affiliates. Compare Certain
Coated Paper Suitable for High-Quality Print Graphics Using
Sheet-Fed Presses from the People’s Republic of China, 75 Fed.
Reg. 24,892, 24,900 (Dep’t Commerce May 6, 2010) (notice of
preliminary determination of sales at less than fair value and
postponement of final determination) (finding that a separate
rate analysis was not required for a respondent located entirely
in Hong Kong) (unchanged in the final determination, 75 Fed.
Reg. 59,217 (Dep’t Commerce Sept. 27, 2010)), with Certain Woven
Electric Blankets from the People’s Republic of China, 75 Fed.
Reg. 5567, 5570 (Dep’t Commerce Feb. 3, 2010) (preliminary
determination of sales at less than fair value and postponement
of final determination) (determining that a full seven factor
separate rate analysis was necessary for a “collapsed entity
[that was] a joint venture between a PRC and a foreign (i.e.,
Hong Kong) company” because the PRC government could exercise
control through the PRC affiliate) (unchanged in the final
determination, 75 Fed. Reg. 38,459 (Dep’t Commerce July 2, 2010)
and the amended final determination, 75 Fed. Reg. 46,911 (Dep’t
Commerce Aug. 4, 2010)).
Court No. 11-00335 Page 21
PRC-wide entity is supported by substantial evidence and is
therefore sustained.
B. The PRC-Wide Assessment Rate Applied in This Review Is
Remanded for Further Consideration and/or Additional
Explanation.
Next, Hilltop argues that the antidumping duty
assessment rate applied to the PRC-wide entity, including
Hilltop, was based on secondary information that was not
properly corroborated in accordance with 19 U.S.C. § 1677e(c).
Hilltop’s Br. at 24-37.40 As explained below, remand is
necessary for further consideration and/or explanation of the
extent to which the PRC-wide rate applied in this review
satisfies the corroboration requirement.
The rate applied to the PRC-wide entity in this review
was calculated in the unfair pricing investigation that led to
the issuance of this antidumping duty order, using information
derived from the original petition to initiate these antidumping
proceedings.41 In that proceeding, Commerce concluded that the
40
See 19 U.S.C. § 1677e(c) (“When [Commerce] relies on secondary
information rather than on information obtained in the course of
an investigation or review, [Commerce] shall, to the extent
practicable, corroborate that information from independent
sources that are reasonably at [Commerce’s] disposal.”).
41
Preliminary Results, 76 Fed. Reg. at 8342 (unchanged in the
Final Results, 76 Fed. Reg. at 51,942) (unchanged in the Remand
Results at 24-25); see Certain Frozen and Canned Warmwater
Shrimp from the People’s Republic of China, 69 Fed. Reg. 70,997,
71,003 (Dep’t Commerce Dec. 8, 2004) (notice of final
(footnote continued)
Court No. 11-00335 Page 22
“112.81 percent [PRC-wide rate] [was] corroborated within the
meaning of [19 U.S.C. § 1677e(c)]” because the agency had
“compared that margin to the margin [Commerce] found for the
largest exporting respondent” and “found that the margin of
112.81 percent ha[d] probative value.”42 The PRC-wide entity was
then assigned this same rate in every subsequent administrative
review of this antidumping duty order, including the fifth
review at issue here, based on adverse inferences applied
because of the PRC’s failure to respond to Commerce’s
questionnaires and cooperate to the best of its ability.
See Preliminary Results, 76 Fed. Reg. at 8342 (discussing
history of the PRC-wide rate); cf. 19 U.S.C. § 1677e(b)(2)
(providing that adverse inferences “may include reliance on
determination of sales at less than fair value) (“Final LTFV
Determination”) (assigning 112.81 percent as the PRC-wide rate).
42
Certain Frozen and Canned Warmwater Shrimp from the People’s
Republic of China, 69 Fed. Reg. 42,654, 42,662 (Dep’t Commerce
July 16, 2004) (notice of preliminary determination of sales at
less than fair value, partial affirmative preliminary
determination of critical circumstances and postponement of
final determination) (“Preliminary LTFV Determination”) (relying
on SAA at 870 (“Corroborate [within the meaning of 19 U.S.C.
§ 1677e(c)] means that [Commerce] will satisfy [itself] that the
secondary information to be used [(which includes information
derived from the petition)] has probative value.”) and citing
Corroboration Memorandum, A-570-893, Investigation (July 2,
2004)) (unchanged in the final determination, 69 Fed. Reg. at
71,003).
Court No. 11-00335 Page 23
information derived from . . . a final determination in the
[underlying unfair pricing] investigation”).
Commerce correctly posits that the PRC-wide rate need
not be corroborated with respect to each particular respondent
who, like Hilltop, is found to form a part of the PRC-wide
entity and thus to be subject to the PRC-wide rate.43
“Commerce’s permissible determination that [a respondent] is
part of the PRC-wide entity means that inquiring into [that
respondent]’s separate sales behavior ceases to be meaningful.”44
But Commerce is required to corroborate the PRC-wide rate with
respect to “its reliability and relevance to the countrywide
entity as a whole.” Peer Bearing, 32 CIT at 1313, 587 F. Supp.
2d at 1327.
To properly corroborate the PRC-wide rate, Commerce
must determine that this rate “is relevant, and not outdated, or
43
Remand Results at 38; cf. Peer Bearing Co. – Changshan v.
United States, 32 CIT 1307, 1313, 587 F. Supp. 2d 1319, 1327
(2008) (“[T]here is no requirement that the PRC-wide entity rate
based on AFA relate specifically to the individual company.
. . . [This] rate must be corroborated according to its
reliability and relevance to the countrywide entity as a
whole.”) (citation omitted); Shandong Mach. Imp. & Exp. Co. v.
United States, No. 07-00355, 2009 WL 2017042, at *8 (CIT June
24, 2009) (explaining that Commerce has no obligation to
corroborate the PRC-wide rate as to an individual party where
that party has failed to qualify for a separate rate).
44
Watanabe Grp. v. United States, No. 09-00520, 2010 WL 5371606,
at *4 (CIT Dec. 22, 2010).
Court No. 11-00335 Page 24
lacking a rational relationship to [the China-wide entity].”
Ferro Union, Inc. v. United States, 23 CIT 178, 205, 44 F. Supp.
2d 1310, 1335 (1999). Here, Commerce determined that the 112.81
percent PRC-wide rate was “corroborated, relevant, and reliable”
because this rate “was fully corroborated during the
investigation.” Remand Results at 38.45 During the
investigation, this rate was corroborated by comparison with the
rate determined for the largest exporting respondent,46 which was
90.05 percent.47 But as Hilltop emphasizes, this comparison rate
was later changed; it was reduced to 5.07 percent following
45
See also Preliminary Results, 76 Fed. Reg. at 8342 (assigning
to the PRC-wide entity in this review the 112.81 percent rate as
“the only rate ever determined for the PRC-wide entity in this
proceeding,” without additional corroboration) (unchanged in the
Final Results, 76 Fed. Reg. at 51,942).
46
Preliminary LTFV Determination, 69 Fed. Reg. at 42,662 (“To
corroborate the [PRC-wide] margin of 112.81 percent, we compared
that margin to the margin we found for the largest exporting
respondent.”) (unchanged in the Final LTFV Determination, 69
Fed. Reg. at 71,003).
47
See Preliminary LTFV Determination, 69 Fed. Reg. at 42,660
(explaining that Commerce had limited its examination to “the
four exporters and producers accounting for the largest volume
of subject merchandise” and listing “Allied” as the largest of
the four); id. at 42,671 (assigning a 90.05 percent weighted-
average dumping margin to “Allied”) (adjusted to 84.93 percent
in the Final LTFV Determination, 69 Fed. Reg. at 71,003)
(adjusted to 80.19 percent in Certain Frozen Warmwater Shrimp
from the People’s Republic of China, 70 Fed. Reg. 5149, 5151
(Dep’t Commerce Feb. 1, 2005) (notice of amended final
determination of sales at less than fair value and antidumping
duty order)).
Court No. 11-00335 Page 25
judicial review. Hilltop’s Br. at 32-33 (relying on Allied Pac.
Food (Dalian) Co. v. United States, __ CIT __, 716 F. Supp. 2d
1339 (2010)). Moreover, the rates for the remaining two
mandatory respondents from the investigation who received rates
above de minimis were also reduced following judicial review.
Id. (relying on Allied Pac. Food (Dalian), __ CIT __,
716 F. Supp. 2d 1339; Shantou Red Garden Foodstuff Co. v. United
States, __ CIT __, 880 F. Supp. 2d 1332 (2012)). Thus the
final liquidation rates for the four mandatory respondents from
the investigation were de minimis, 5.07 percent, 7.20 percent,
and 8.45 percent.48 These numbers are significantly different
from the (subsequently invalidated) 90.05 percent comparison
rate that Commerce used to corroborate the 112.81 rate assigned
to the PRC-wide entity in the investigation and in every segment
of this proceeding thereafter.
As the comparison margin used to corroborate the PRC-
wide rate was subsequently shown not to reflect commercial
48
Final LTFV Determination, 69 Fed. Reg. at 70,998 (listing
“Zhanjian Goulian; Yelin; Allied; and Red Garden” as the four
mandatory respondents in the investigation); id. at 71,003
(listing a de minimis rate for “Zhanjian Goulian”); Allied Pac.
Food (Dalian), __ CIT at __, 716 F. Supp. 2d at 1342, 1352(affirming reduction of the rate for “Allied” to 5.07 percent);
id. (affirming reduction of the rate for “Yelin” to
8.45 percent); Shantou Red Garden Foodstuff, __ CIT at __,
880 F. Supp. 2d at 1334-35 (affirming reduction of the rate for
“Red Garden” to 7.20 percent).
Court No. 11-00335 Page 26
reality,49 Commerce may no longer rely on that comparison to
satisfy itself that the PRC-wide rate assigned in this review
has probative value. Compare with Watanabe, 2010 WL 5371606,
at *4 (holding that Commerce may rely on a countrywide rate that
was corroborated in an earlier segment of an antidumping
proceeding if the record contains “no evidence questioning the
prior corroboration”) (citations omitted). Accordingly,
Commerce has failed to establish that the 112.81 percent rate
assigned to the PRC-wide entity (which includes Hilltop) in this
review “is corroborated, relevant, and reliable.” See Remand
Results at 37-38. Remand is therefore necessary on the issue of
proper corroboration of the secondary information used to
calculate the PRC-wide rate in this review.50 On remand,
Commerce must either adequately corroborate the 112.81 percent
rate and explain how its corroboration satisfies the
requirements of 19 U.S.C. 1677e(c), or else calculate or choose
a different countrywide rate that better reflects commercial
49
See Allied Pac. Food (Dalian) Co. v. United States, 30 CIT
736, 435 F. Supp. 2d 1295 (2006) (remanding Commerce’s
calculation of Allied’s rate during the investigation); Allied
Pac. Food (Dalian), __ CIT at __, 716 F. Supp. 2d at 1342, 1352(affirming reduction of the rate for Allied to 5.07 percent).
50
See 19 U.S.C. § 1677e(c) (requiring corroboration of
“secondary information”); SAA at 870 (defining “secondary
information” to include “information derived from the petition
that gave rise to the investigation or review”).
Court No. 11-00335 Page 27
reality, as supported by a reasonable reading of the record
evidence.
CONCLUSION
For all of the foregoing reasons, Commerce’s
redetermination on remand is sustained except with regard to the
antidumping duty assessment rate applied to the PRC-wide entity,
which includes Hilltop. On remand, Commerce must either
adequately corroborate the 112.81 percent PRC-wide rate and
explain how its corroboration satisfies the requirements of
19 U.S.C. 1677e(c), or calculate or choose a different
countrywide rate that better reflects commercial reality, as
supported by substantial evidence. Commerce shall have until
September 9, 2013 to complete and file its remand determination.
Plaintiff and Defendant-Intervenors shall have until
September 23, 2013 to file comments. Plaintiff, Defendant, and
Defendant-Intervenors shall have until October 9, 2013 to file
any reply.
It is SO ORDERED.
/s/ Donald C. Pogue ______
Donald C. Pogue, Chief Judge
Dated: July 23, 2013
New York, NY