Shandong Huarong Mach. Imp. & Exp. Co. v. United States

33 Ct. Int'l Trade 810, 2009 CIT 64
CourtUnited States Court of International Trade
DecidedJune 24, 2009
DocketCourt 07-00355
StatusPublished

This text of 33 Ct. Int'l Trade 810 (Shandong Huarong Mach. Imp. & Exp. Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shandong Huarong Mach. Imp. & Exp. Co. v. United States, 33 Ct. Int'l Trade 810, 2009 CIT 64 (cit 2009).

Opinion

OPINION AND ORDER

EATON, Judge:

This action is before the court on plaintiff Shan-dong 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 antidump-ing duty orders covering separate categories of goods, including those *811 at issue here: bars/wedges; hammers/sledges; and axes/adzes. Id.

In the Final Results, Commerce found that plaintiff failed 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.

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(bXl)(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- *812 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 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 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.

*813 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.

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Peer Bearing Co. Changshan v. United States
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