Shandong Chenhe International Trading Co. v. United States

Slip Op. 10-129
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________
:
SHANDONG CHENHE INTERNATIONAL :
TRADING CO., LTD., :
:
Plaintiff, : Before: Richard K. Eaton, Judge
:
v. : Court No. 08-00373
:
UNITED STATES, : Public Version
:
Defendant, :
:
and :
:
FRESH GARLIC PRODUCERS :
ASSOCIATION, CHRISTOPHER :
RANCH LLC, THE GARLIC COMPANY,:
VALLEY GARLIC, and VESSEY AND :
COMPANY, INC., :
:
Def.-Ints. :
______________________________:
OPINION
[Commerce’s final determination rescinding plaintiff’s new
shipper review is sustained.]
Dated: November 22, 2010
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
(Bruce M. Mitchell, Ned H. Marshak, Elaine F. Wang, and Andrew T.
Schultz), for plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Reginald T. Blades, Jr., Assistant Director, Civil
Division, United States Department of Justice (Richard P.
Schroeder); Office of the Chief Counsel for Import
Administration, United States Department of Commerce (Evangeline
D. Keenan), of counsel, for defendant.
Kelley Drye & Warren, LLP (Michael J. Coursey and John M.
Herrmann), for defendant-intervenors.
Eaton, Judge: This matter is before the court on the motion
Court No. 08-00373 Page 2
for judgment on the agency record of plaintiff Shandong Chenhe
International Trading Co., Ltd. (“plaintiff” or “Chenhe”). See
Br. In Supp. of Pl.’s Rule 56.2 Mot. For J. Upon the Agency R.
(“Pl.’s Br.”). Defendant the United States, and defendant-
intervenors the Fresh Garlic Producers Association, Christopher
Ranch LLC, The Garlic Company, Valley Garlic, and Vessey and
Company, Inc. (collectively, “defendant-intervenors”) oppose the
motion. See Def.’s Mem. In Opp’n to Pl.’s Rule 56.2 Mot. for J.
Upon the Agency R. (“Def.’s Mem.”); Def-Ints.’ Br. In Resp. To
Pl.’s Mot. For J. On the Agency R. (“Def.-Ints.’ Br.”).
By its motion, plaintiff challenges the final results of the
United States Department of Commerce’s (“Commerce” or the
“Department”) twelfth new shipper review of the antidumping duty
order on fresh garlic from the People’s Republic of China (“PRC”)
for the period of review (“POR”) beginning on November 1, 2006
and ending on April 30, 2007. See Fresh Garlic from the PRC, 73
Fed. Reg. 56,550 (Dep’t of Commerce Sept. 29, 2008) (final
results and rescission, in part, of twelfth new shipper review)
and the accompanying Issues and Decision Memorandum(Dep’t of
Commerce Sept. 19, 2008) (“Issues & Dec. Mem.”) (collectively,
“Final Results”). Specifically, plaintiff insists that Commerce
erred in rejecting its lone U.S. sale as not being bona fide.
Jurisdiction lies pursuant to 28 U.S.C. § 1581(c) (2006) and 19
U.S.C. § 1516a(a)(2)(B)(iii).
Court No. 08-00373 Page 3
For the reasons set forth below, the court denies
plaintiff’s motion and sustains Commerce’s Final Results.
BACKGROUND
On May 17, 2007, plaintiff asked Commerce to initiate a new
shipper review of its sale of fresh garlic. Fresh Garlic from
the PRC, 72 Fed. Reg. 38,057, 38,057-58 (Dep’t of Commerce July
12, 2007) (initiation of antidumping duty new shipper reviews)
(“Initiation”). The purpose of a new shipper review is to
determine whether an exporter or producer, whose sales were not
examined in an investigation, is (1) entitled to its own
antidumping duty rate under the order resulting from the
investigation, and (2) if so, to calculate that rate. To
calculate a rate, Commerce must determine the normal value,1
export price,2 and the antidumping duty margin3 for each entry of
1
Normal value is defined as:
the price at which the foreign like product
is first sold (or, in the absence of a sale,
offered for sale) for consumption in the
exporting country, in the usual commercial
quantities and in the ordinary course of
trade and, to the extent practicable, at the
same level of trade as the export price or
constructed export price . . . .
19 U.S.C. § 1677b(a)(1)(B)(i).
2
The “export price” is generally defined as “the price
at which the subject merchandise is first sold . . . by the
producer or exporter of the subject merchandise outside of the
United States to an unaffiliated purchaser in the United States
Court No. 08-00373 Page 4
the subject merchandise. 19 U.S.C. § 1675(a)(2)(A).
Commerce initiated the review on July 12, 2007. Initiation,
72 Fed. Reg. at 38,060. On May 1, 2008, the Department published
its preliminary results. Fresh Garlic from the PRC, 73 Fed. Reg.
24,042, 24,042 (Dep’t of Commerce May 1, 2008) (preliminary
results of the 12th new shipper reviews) (“Preliminary Results”).
In the Preliminary Results, Commerce found that Chenhe had
imported the subject merchandise into the United States in a bona
fide sale at a non-dumped price. Id. at 24,047. Commerce then
preliminarily calculated a dumping margin of zero for the
company. Id.After these results were published, defendant-intervenors
filed a case brief alleging that Chenhe’s purported sale was, in
fact, not bona fide. The brief claimed that Commerce had made
errors in its analysis and asserted that if Commerce had taken
specific evidence into consideration it would have not concluded,
in the Preliminary Results, that plaintiff was entitled to a
separate rate. Conf. R. (“CR”) Doc. No. 102 (“Def.-Int. Case
or to an unaffiliated purchaser for exportation to the United
States . . . .” 19 U.S.C. § 1677a(a).
3
An antidumping duty margin is “the amount by which the
normal price exceeds the export price or constructed export price
of the subject merchandise.” 19 U.S.C. § 1677(35)(A). If the
price of an item in the home market (normal value) is higher than
the price for the same item in the United States (export price),
then the dumping margin comparison produces a positive number
that indicates dumping has occurred.
Court No. 08-00373 Page 5
Brief”).
In its Final Results, the Department took defendant-
intervenors’ arguments into account and determined that Chenhe’s
sale was not bona fide. Commerce then rescinded the new shipper
review as to the company. Final Results, 73 Fed. Reg. at 56,551.
STANDARD OF REVIEW
The court must uphold a final determination by the
Department in an antidumping proceeding 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. Applicable Law
Under 19 U.S.C. § 1675(a)(2)(B), upon request, Commerce
shall conduct administrative reviews “for new exporters and
producers” and “establish . . . individual weighted average
dumping margin[s]” for them. 19 U.S.C. § 1675(a)(2)(B)(i).
Thus, the statute provides new exporters or producers the
opportunity to establish that they are entitled to an individual
rate under an existing order. It is Commerce’s practice during
these new shipper reviews to determine whether the new exporters
and producers have conducted bona fide or commercially reasonable
transactions. See 19 C.F.R. § 351.214(b)(2) (2009); Hebei New
Court No. 08-00373 Page 6
Donghua Amino Acid, Co., Ltd. v. United States, 29 CIT 603, 608,
374 F. Supp. 2d 1333, 1338 (2005) (“Hebei”). In conducting this
test, Commerce’s goal is to determine “whether the sale(s) under
review are indicative of future commercial behavior.” Id. at
613, 374 F. Supp. 2d at 1342.
This Court has, on a number of occasions, upheld Commerce’s
use of this analysis. See, e.g., Hebei, 29 CIT at 608-09, 374 F.
Supp. 2d at 1338; Tianjin Tiancheng Pharmaceutical Co., Ltd., v.
United States, 29 CIT 256, 366 F. Supp. 2d 1246 (2005)
(“Tianjin”); Windmill International Pte., Ltd., v. United States,
26 CIT 221, 193 F. Supp. 2d 1303 (2002) (“Windmill”). As laid
out in Hebei, Commerce normally employs a totality of the
circumstances test to determine whether the transaction is
“commercially reasonable” or “atypical of normal business
practices.” 29 CIT at 610, 374 F. Supp. 2d at 1339 (quoting
Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313). Commerce
looks at, among other factors, “the price and quantity” of the
goods sold. Id.II. Commerce’s Determination
Chenhe’s request for an individual dumping margin was based
on its sole entry during the POR. Initiation, 72 Fed. Reg. at
38,057. In the Final Results, Commerce found that “[b]ased on
the totality of the circumstances . . . , the Department has
Court No. 08-00373 Page 7
determined that Chenhe’s single POR sale is not a bona fide
transaction, and subsequently has rescinded the new shipper
review . . . .” Issues & Dec. Mem. at Comm. 1.
In making this determination, Commerce stated that its
practice, when applying its totality of the circumstances test,
is “to examine both the quantity and value of other POR entries
of subject merchandise from the PRC as well as a respondent’s
sales to third countries, when available, in evaluating the price
and quantity of a single POR sale for the purposes of the bona
fides analysis.” Issues & Dec. Mem. at Comm. 1. The Department
further explained that its determination that Chenhe’s sale was
not bona fide was “based on a combination of factors including:
[the entry’s] high price, its low quantity, and the fact that it
was atypical of Chenhe’s U.S. customer’s normal commercial
practices.” Issues & Dec. Mem. at Comm. 1.
With respect to quantity, Commerce found that Chenhe’s sole
sale of fresh garlic was: (1) smaller than the average sale
amount for all Chinese exporters shipping to the United States
during the POR; (2) markedly less than Chenhe’s average sales to
third countries during the POR; and (3) smaller than the average
amount imported by Chenhe’s U.S. customer during the POR.4
4
Commerce found that the quantity of Chenhe’s sale was
[[ ]] kilograms, and out of the [[ ]] entries from
China during the POR, it was the [[ ]] entry.
CR Doc. No. 109 (“BPI Memo”) 2. The average quantity of all
(continued...)
Court No. 08-00373 Page 8
Issues & Dec. Mem. at Comm. 1 (“[T]he Department finds that the
quantity of Chenhe’s sale . . . fell substantially below the
average U.S. import quantities [from China] . . . . [T]he
department notes that when the quantity of Chenhe’s U.S. sales is
compared to the average quantity of its third-country sales, the
quantity is atypical. . . . Furthermore, . . . the quantity . .
. of Chenhe’s sale [was] atypical of the other purchases of
subject garlic made by Chenhe’s U.S. customer during the POR.”).
As a result of these findings, Commerce concluded that the small
size of Chenhe’s sale supported a finding that the entry was
unrepresentative of sales during the POR and thus not indicative
of future sales by the company. Issues & Dec. Mem. at Comm. 1.
With regard to sales price, the Department further found
that the relatively high sales price of Chenhe’s entry was an
even greater indication that the sale was atypical of what
Chenhe’s future behavior would be:
[T]he Department compared the per-unit price
for Chenhe’s single POR sale with the
4
(...continued)
entries during the POR was [[ ]] kilograms and Chenhe’s
entry was [[ ]] than the average quantity for
all entries. BPI Mem. 2 Commerce additionally found that
Chenhe’s average shipment to third countries was [[ ]]
kilograms, which was [[ ]] than the quantities
of Chenhe’s single U.S. sale. BPI Mem. 2 Chenhe’s U.S.
purchaser made [[ ]] other purchases during the POR, with an
average quantity of [[ ]] kilograms, thus the quantity
Chenhe’s entry was [[ ]] than the average
quantity of the U.S. purchaser’s other transactions. BPI Mem. 2
Court No. 08-00373 Page 9
[Average Unit Value (“AUV”)] for all entries
under HTSUS 0703.20.0010:5 FRESH WHOLE GARLIC
BULBS, and found that the price of Chenhe’s
single POR sale was unusually high when
compared to the weighted AUV of all other
entries under this HTSUS subcategory. . . .
The Department further note[d] that Chenhe’s
POR sale subject to this review was also
atypical when compared to the AUV of Chenhe’s
third country sales. . . .
Issues & Dec. Mem. at Comm. 1.
In other words, Commerce found that the price paid for
Chenhe’s garlic was abnormally high6 when compared to: (1) other
Chinese entries during the POR; and (2) the price of the
company’s sales to third-country purchasers. In addition, the
Department concluded that the price paid by Chenhe’s U.S.
customer was markedly higher than the customer paid to other
Chinese exporters and producers during the POR.7
5
All parties agree that in the preliminary results,
Commerce incorrectly used HTSUS category 0703.20.0020: Fresh
Peeled Garlic to evaluate Chenhe’s price and quantity data.
Issues & Dec. Mem. at Comm. 1. In the Final Results, Chenhe’s
data was analyzed using HTSUS category 0703.20.0010: Fresh Whole
Garlic Bulbs. Id. In doing so, Commerce re-evaluated Chenhe’s
submitted data using the correct HTSUS category and re-analyzed
Chenhe’s third-country sales and additional data put on the
record.
6
The price for Chenhe’s single entry was [[ ]].
The average unit value for all of the entries from China during
the POR was [[ ]]. Thus, Chenhe’s price was [[
]] than the average unit value for all entries. BPI Memo 2.
The average unit value of Chenhe’s third country sales was [[
]]. BPI Mem. 2
7
The U.S. purchaser had [[ ]] purchases from [[ ]]
other exporters of the subject merchandise during the POR, the
(continued...)
Court No. 08-00373 Page 10
Based on these findings, Commerce determined that
“[Chenhe’s] sale does not provide a reasonable or reliable basis
for calculating an antidumping duty margin.” Issues & Dec. Mem.
at Comm. 1. Therefore, since Chenhe had only one entry during
the POR, and that entry was determined, based on quantity and
price, to be non-bona fide, Commerce rescinded Chenhe’s new
shipper review and did not calculate a separate antidumping duty
for the company. Id.
III. Analysis
The issue before the court is whether Commerce erred in its
decision to rescind the new shipper review based on its finding
that Chenhe’s sale was not bona fide. For its part, Chenhe
maintains that, as a matter of law, the Department can reject its
sale only if it was “unrepresentative and extremely distortive,”
and that substantial evidence did not support such a finding.
Pl.’s Br. 12 (quoting Hebei, 29 CIT at 610, 374 F. Supp. 2d at
1339). Commerce counters that both the low quantity of Chenhe’s
entry and its high price lead to a conclusion that the single
sale under review was not indicative of future commercial
behavior. Issues & Dec. Mem. at Comm. 1.
7
(...continued)
average unit value of these entries was [[ ]]. Chenhe’s
sale price was thus [[ ]] than the average unit value
of other transactions made by the U.S purchaser. BPI Memo 2.
Court No. 08-00373 Page 11
The bona fide analysis conducted in new shipper reviews has
been addressed by this Court on multiple occasions. The case
that corresponds most closely to the facts before the court is
Hebei, which involved Commerce’s determination that a single
entry of glycine into the United States was not a bona fide sale.
Hebei, 29 CIT at 604, 374 F. Supp. 2d at 1334. The Court in
Hebei upheld, as reasonable, Commerce’s use of the “totality of
circumstances” test to determine if a sale was bona fide, and
rejected the plaintiff’s call for “bright line rules” regarding
what constituted an acceptable transaction. Id. at 610, 374 F.
Supp. 2d at 1339.
In Hebei, the Department determined that the single entry at
issue could not provide the basis for making a new shipper
determination because “the pricing of the sale is artificially
high and otherwise commercially unreasonable, . . . the quantity
of the single shipment is extremely low in comparison with other
sales from the People's Republic of China” and “the importer has
not resold the merchandise and has otherwise not acted in a
commercially reasonable manner.” Id. at 606, 374 F. Supp. 2d at
1336. In reaching its holding, the Hebei Court found that the
quantity of the questioned sale was “extremely low” when compared
with: (1) sales of other Chinese exporters to U.S. purchasers;
and (2) the exporter’s own sales to other U.S. purchasers and to
purchasers in third countries. Id. at 614-15, 374 F. Supp. 2d at
Court No. 08-00373 Page 12
1342-43.
As to price, the Court found that Commerce had supported its
conclusion that the price was abnormally high by a comparison of
the sales price with: (1) the price of all similar (clearly not
aberrational) entries made from China; and (2) the price of all
similar entries from whatever source. Id. at 611, 374 F. Supp.
2d at 1340 (“These price comparisons constitute substantial
evidence for Commerce’s decision that [Hebei’s] sales price was
‘substantially higher than any observed value.’”).
Other cases have looked at similar factors when applying the
totality of circumstances test. The Tianjin case also involved a
single shipment of glycine from the PRC to the United States.
Tianjin, 29 CIT at 256, 366 F. Supp. 2d at 1247. In that case,
Commerce also rescinded the new shipper review, relying on its
finding that “the price at which the goods were sold was not
‘commercially reasonable.’” Id. at 258, 366 F. Supp. 2d at 1248.
Commerce found the sales price to be atypical of both the market
as a whole and of plaintiff’s own sales prices.8 Id. at 261, 366
F. Supp. 2d at 1251 (“Accordingly, Commerce found that
Plaintiff’s price was out of line with both the benchmark of
other Chinese exporters’ sales of glycine to the United States,
8
In addition to the atypical price, the single entry at
issue in Tianjin was paid for nine months late, and there were
irregularities in the Customs papers related to the entry,
further supporting Commerce’s finding that the sale was not bona
fide. Tianjin, 29 CIT at 270, 366 F. Supp. 2d at 1259.
Court No. 08-00373 Page 13
and with Plaintiff’s own pricing practice as it applied to third-
country sales.”). The Tianjin Court sustained Commerce’s finding
that in order to be bona fide, a transaction must be a “normal”
sale in the context of good business practice generally and “a
good future indicator of Plaintiff’s future sales in the market.”
Id. at 276, 366 F. Supp. 2d at 1263.
Windmill involved a new shipper review for an exporter of
cut-to-length carbon steel plate from Romania. Windmill, 26 CIT
at 221, 193 F. Supp. 2d at 1304-05. In that case, Commerce
looked at a number of factors in making its determination,
including that the merchandise was shipped by air rather than by
sea and that the purchaser re-sold the merchandise at a loss.9
In addition, Commerce assigned great weight to its finding that
“[t]he quantity of the sale was atypical of that which Windmill
normally sells to the U.S. [purchaser]. . . .” Id. at 225, 193
F. Supp. 2d at 1307 (citations omitted).
The Windmill Court also found important Commerce’s finding
that “[s]ix months prior to and subsequent to the sale [at
issue], Windmill made sales [of different merchandise] to the
same U.S. purchaser that was substantially larger than the test
case quantity.” Id. at 229, 193 F. Supp. 2d at 1311 (citations
9
In the proceedings before Commerce in Windmill, the
Department also concluded that “[t]here [was] no evidence that
any commercial factors that normally influence price negotiations
played any role in setting the price for this sale.” Windmill,
26 CIT at 231, 193 F. Supp. 2d at 1313 (citations omitted).
Court No. 08-00373 Page 14
omitted). Thus, the Court upheld Commerce’s conclusion that the
transaction “was not commercially reasonable and was atypical of
the normal business practices between Windmill and the United
States purchaser.” Id.Commerce’s determination that Chenhe’s sale was not bona
fide is sustained. In reaching this holding, the court is aware
that the size of an entry does not necessarily control Commerce’s
analysis. See Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313(“[S]ingle sales, even those involving small quantities, are not
inherently commercially unreasonable and do not necessarily
involve selling practices atypical of the parties’ normal selling
practices.”) (citations omitted). Nonetheless, the size of the
sale can raise questions as to whether the purchaser would buy
the merchandise in the future in the same quantity at the same
price. See Tianjin, 29 CIT at 260, 366 F. Supp. 2d at 1250(“[B]ecause the ultimate goal of the new shipper review is to
ensure that the U.S. price side of the antidumping calculation is
based on a realistic figure, any factor which indicates that the
sale under consideration is not likely to be typical of those
which the producer will make in the future is relevant.”).
In addition, while plaintiff’s reliance on a single sale
need not be fatal, a single sale leaves little to review. See
Tianjin, 29 CIT at 275, 366 F. Supp. 2d at 1263 (“In one-sale
reviews, there is, as a result of the seller’s choice to make
Court No. 08-00373 Page 15
only one shipment, little data from which to infer what the
shipper’s future selling practices would look like. This leaves
the door wide to the possibility that the sale may not, in fact,
be typical, and that any resulting antidumping duty calculation
would be based on unreliable data.”).
As to Chenhe’s legal argument that its shipment must be
found “extremely distortive” in order for it to be rejected, the
company seeks to set the bar too high. The purpose of a new
shipper review is to determine if an exporter or producer is
entitled to a separate rate and to set that rate. In order for
Commerce to set an accurate rate, it must have before it a
transaction from which it can reasonably determine a margin.
Thus, a single transaction need not be “extremely distortive” in
order to be found unsuitable. Rather, to be used as a basis for
setting an individual rate, a sale must be typical of normal
business practices. See Windmill, 26 CIT at 231, 193 F. Supp. 2d
at 1313.
As to the evidence Commerce cites to justify its conclusion,
Chenhe does not dispute that its entry contained one of the
smallest quantities of goods of any entry from China during the
POR. Nor does it dispute that the size of the shipment was small
when compared to Chenhe’s sales to other countries and other
purchases by the U.S. purchaser. Thus, it was reasonable for
Commerce to conclude the small quantity of Chenhe’s sale would
Court No. 08-00373 Page 16
not be indicative of typical future transactions.
As to the price paid for the shipment of merchandise,
Commerce found it to be “unusually high when compared to the
[average unit value] of all entries” during the POR. Issues &
Dec. Mem. at Comm. 1. Commerce also found the price to be
significantly higher than Chenhe’s sales to third countries and
higher than its buyer’s other purchases. Id. Plaintiff contends
that Commerce erred in its price analysis in comparing the price
of the entry with the AUVs of the other Chinese entries during
the POR. Chenhe insists that Commerce should have instead
compared the price of the entry to other individual entries.
Pl.’s Br. 23 (“The bona fides of the Chenhe sale is based on the
Department’s determination as to whether the price is
commercially reasonable—a determination which requires a
comparison of that price to other prices which fall within the
norm, regardless of their relationship to the average”).
If Commerce had done so, plaintiff argues, it would have
found that the price of other entries that were not found to be
atypical had prices closer to Chenhe’s price than to the AUV.
Pl.’s Br. 23. Put another way, plaintiff urges the court to find
that Commerce should have compared the price of its single entry
to other entries during the POR with prices more in line with the
price of Chenhe’s entry. Thus, plaintiff observes that a number
of entries during the POR were relatively close to Chenhe’s
Court No. 08-00373 Page 17
price, although no entry had a price as high as Chenhe’s.10
Pl.’s Reply Br. 10.
Chenhe’s argument is unconvincing. Commerce’s use of AUV
data has been upheld by this Court in the past because “the
larger the sample, the less risk run that the sample chosen is
extreme or unusual simply by chance.” Tianjin, 29 CIT at 267,
366 F. Supp. 2d at 1256. In other words, using the average of a
large sample is a better indicator of normal activity than a
comparison of a smaller number of selected sales. Here, Chenhe’s
price was dramatically higher than the AUV for other Chinese
entries during the POR, as well as higher than the AUV for
Chenhe’s sales to third countries during the POR and its buyer’s
other purchases. While the sale price may well have been close
to the high end of all Chinese sales during the POR, this
evidence does little to detract from the conclusion that Chenhe’s
sale was atypical of normal business practices.
Finally, plaintiff argues that the price of its entry
included a premium to compensate Chenhe for agreeing to pay any
antidumping duties.11 As such, Chenhe maintains that the
10
Plaintiff cites to prices of [[
]] to support this argument. Pl.’s
Reply Br. 10.
11
Chenhe’s transaction was the only transaction of all of
the transactions during the POR that was under [Delivered Duty
Paid (“DDP”)] sales terms; all other transactions, including the
other transactions by the U.S. purchaser were made under [FOB]
(continued...)
Court No. 08-00373 Page 18
purchase price should be reduced to account for this premium.12
Pl.’s Br. 20. Chenhe’s U.S. customer, however, would not respond
to repeated questionnaires from Commerce and inquiries from
Chenhe’s counsel concerning the terms of the sale. As a result,
Commerce could not substantiate the company’s claim of an
agreement relating to the antidumping duties. Ultimately,
Commerce found that there was “no evidence on the record of this
review supporting Chenhe’s claim that its U.S. customer agreed to
pay a higher premium in exchange for Chenhe’s agreement to act as
the [importer of record] and be responsible for the [antidumping
duty] liability.” Issues & Dec. Mem. at Comm. 1 n.14.
In disputing this conclusion, plaintiff insists that the
terms of the sale themselves “constitute the best evidence that
the buyer and seller understood the significance of the
[antidumping duty] liability when they negotiated the material
terms of this transaction” and that “[t]here was simply no reason
. . . for Chenhe . . . to submit any additional documentation to
support the self-evident fact that . . . the price will be
influenced by a decision as to which party assumes responsibility
for this liability.” Pl.’s Br. 20. In other words, Chenhe
11
(...continued)
sales terms. BPI Memo 3.
12
It should be noted that Chenhe’s putative agreement to
reimburse the importer for any antidumping duties imposed on the
imported merchandise might run afoul of the “absorption”
provisions found in 19 C.F.R. § 351.402(f).
Court No. 08-00373 Page 19
claims that the high price paid for the merchandise is
substantial evidence that it included an amount to compensate
plaintiff for assuming the burden of the duties.
The court finds that Commerce’s decision not to credit
plaintiff’s argument that the purchase price should be reduced to
compensate for antidumping duties is supported by substantial
evidence. During the course of the review, Chenhe’s U.S.
purchaser refused to respond to Commerce’s questionnaires
regarding the negotiations leading up to the sale, and as to the
terms of sale themselves. See CR Doc. Nos. 52, 63 (responses
from U.S. customer to Commerce and Counsel for Chenhe regarding
additional questionnaires). Nor would the purchaser answer
questions posed by Chenhe’s counsel. CR Doc. Nos. 52, 63. As a
result, Commerce had no information before it concerning: (1)
whether the sales price was increased to account for any
antidumping duties to be paid by the seller; or (2) the amount by
which the sales price was increased. Thus, there is nothing on
the record to support plaintiff’s terms of sale contention.
Further, the high price paid does not constitute evidence
that there was an agreement to compensate plaintiff for assuming
the antidumping duties, particularly because plaintiff has not
made any representation as to the amount that plaintiff was
supposed to be compensated. At oral argument, counsel for
plaintiff was unable to offer the court any additional
Court No. 08-00373 Page 20
explanation of plaintiff’s claim, nor a methodology by which to
calculate the size of the claimed premium. Tr. of Conf. Or. Arg.
at 47. As such, the court finds reasonable Commerce’s decision
not to reduce the entry’s price in order to take the claimed
terms of sale into account.
Ultimately, the court must hold that substantial evidence
supports Commerce’s finding that Chenhe’s sale was not bona fide
because it was not “a good future indicator of Plaintiff’s future
sales in the market.” Tianjin, 29 CIT at 276, 366 F. Supp. 2d
at 1263. The purpose of a new shipper review is to determine an
individual antidumping margin for an importer that did not
receive a separate rate under an antidumping duty order. In
order to calculate an accurate antidumping duty margin for a new
shipper, Commerce must examine sales data that is indicative of
the respondent’s normal business practices so as to judge its
future commercial behavior. Hebei, 29 CIT at 613, 374 F. Supp.
2d at 1342. If the evidence of the entry on the record is not
indicative of typical business practices, no accurate individual
rate can be set. Accordingly, in this case, the low quantity and
high price for the single sale constitutes substantial evidence
that the transaction could not be used as a basis for a separate
rate.
Court No. 08-00373 Page 21
CONCLUSION
Plaintiff’s motion for judgment on the agency record is
denied and Commerce’s decision to rescind the new shipper review
as to Chenhe is sustained. Judgment shall be entered
accordingly.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: November 22, 2010
New York, New York