specifically we believe that the determination by commerce and other firm by the court of international trade is flawed both legally and factually legally the commerce department applied a standard requiring actual control which is contrary to the statu the specific statements of the statement of administrative action the commerce department on regulations and the preamble accompanying congress current regulations the the evidence of the improperly applied a standard is apparent throughout the confidential the pricing term sin is something is such a three dollars says pricing follows market prices of steel or something something to that effect possibility that a offer to buy from the customer could be rejected by oman chester's doesn't rule that out for sure but i think it's important to bear in mind that a close supplier relationship doesn't require that you have a fixed price or fixed pricing what it requires is the potential to exercise restraint or direction over a company's decisions concerning production cost or pricing and how this goes exist there are research how does that exist here are confidential so there are there's a provision that you referred to that does give rise to that provision is always in effect at all times and applies to all all orders placed by the u s customer so whether it's been actually vote is or is not a question because it's always in play and that's what the statute requires is that the potential to exercise control and this case the potential to exercise control over production exists all the time just because of the brother already provision  don't know the name or being in necessary for that your honor that is legally enforceable contract will provision between the parties as a matter of law what is required here is the potential to exercise directional restraint restraint or direction this transnational process there is a concern about affiliation potential control or control or potential control and here it's on that concern the allegation is if the customer has the potential to control the supplier if a customer has a potential to control the supplier that would naturally lead the customer to want low prices which would tend therefore to increase the dumping margin what is the domestic your clients concern with an increase in the dumping large well i think it's not merely the dynamic doesn't merely rely on the desire for lower prices as you can tell from the provision that was just referred to part of this will be  knowing that you have reliable continuity of supply about any potential supply interruptions that's extraordinarily valuable to us customer especially one who is importing products from overseas where supply  so for my clients point of view you know we see this this is this relationship giving rise to the potential to facilitate increased imports at whatever price and increase volumes of those imports which harm the market and so that's that's  broadened the definition of affiliation in order to be because as it said the traditional focus on stock ownership alone equity relationships fails to address adequately modern business relationships which often find one f operationally in a position to exercise restraint or direction over another firm even in the absence of an equity relationship there are many facets to the relationship it's not really just you know price drives many decisions but price it is irrelevant if you don't have continuity of supply so as a matter of law we believe the commerce department apply the wrong standards very clear on the face of the record below the determination below is also flawed factual statute gives reference to the fact that a close apply relationship is one in which one firm is reliant upon the other and the evidence below is abundantly clear that among fasteners is reliant and was reliant during the period investigation on the us customer this is a brand new mill producer in amman who could not produce nails prior to its founding in two thousand and twelve who sold an extraordinary super majority of its entire global production to one single customer in the united states why does a high percentage of sales so one customer necessarily implicate controlled rather than just him market desire to please one cost well it from the extraordinarily high level of sales to the one customer order gives rise to a relationship of alliance and after alliance you look at the question of control patrol is a can't be that just relying on customer indicates control and it was  of sales made to the single customer by a company who who did not have and didn't exist before two thousand and twelve and you look at it in terms of the temporal aspect of it subject to a long term supply agreement there's no attempting to invoke some sort of a per se rule it seems to me and i'm not sure this worked i'm not certain we're trying to invoke a per se will your are but what we do believe firmly is that the record here is compelling but frankly you know i look at you look at the evidence on the record below and if you can't find clothes supplier affiliation on these facts we don't know when you can't you know it's a very clear cut case not only factually but also in terms of what the law requires it appears to us that the commerce department approach here was and is oriented to try to avoid this finding and that's partly why the concern is enough to bring to the appeal not only to the court of international trade but before this court the trial court correctly sustained commerces determination that oman as a nurse is not affiliated with us customer because commerce is determination of supported by substantial record evidence respect commerce responded to each and every one of the allegations that mid continent made during the administrative proceedings on commerce made determination that was squarely within the scope of the law it made a determination that there was no with alleviation here based upon the entirety of the record and that entire record included the and well as reviewing their production with respect to the facts the facts as they are revealed in the a great upon terms that were mutually agreeable to them and mutually beneficial to them both further the one provision that was discussed earlier which is the subject of b p i and so i will not speak to the specifics of it does not detract from the other sections of the contract which demonstrate arm's length transactions that the prices are not fixed in favor of standard when the affiliation is in the context on the domestic side on the us side of the ocean and it's about the customer controlling the supplier presumptively to get better terms than i would have thought at least in general lower prices which seems us odd thing for a domestic industry to be complaining about in a proceeding in which lower prices on  the constructed export side or the export side would lead only to higher dumping which i do not know the answer to your question your honor i wish that i did it is not a part of the issues and decision memorandum overwhelmingly is a market oriented contract and many provisions in that supply agreement that focus on the market determining the prices that the two parties must come to agreement on the record also has evidence of rejecting offers made by their us customers under this agreement the record also has evidence of a month festers losing sales to this customer because the two parties cannot come to agreement on price so in our view this is a market oriented long term supply agreement not unusual the department looked at that along with the voluminous other record evidence of oman fasteners commercial relationship with this customer and as well importantly the commerce department looked at how much festers commercial relationship with all of its other and mid of the smaller u s customers the on say verification as reflected in the record shows commerce examine not of the country under investigation oman and importantly the specific product under investigation steel needles for unlike product in this case congress did neither one of those things instead it chose to rely on  financial statement of a producer in a rd country that makes no steel nuance it's ended on that question it is your position record would your position require us to say that the statute prohibited commerce from saying when you submitted as the only real alternative a partially translated document that commerce particularly in this and there are there are cases that suggest that the refusal to reopen the record you can be arbitrary and capricious action by an agency the the difficulty here it seems to me is that in the proceeding initial submission of profit data on october st in this case we included the partially translated l s i data financial statement as part of a larger record of profit determinations by the commerce department involving this product that these are two different questions that the partially translated l s a statement in fact was on the record in our case here and we submitted it and our position is that once it's on the record congress has that that information and should have relied upon it given this this is important to us given its reliance on that same statement contemporaneously in another steel mills proceeding as the best evidence and particularly in comparison to the high tech statement that they rejected in those contemporaneous proceedings but apply and here leading to the unanimous profit rates that they that they used with their requirements was that if you  submitting a fully translated documents and it is that the government's a defense in this case that they don't want fasteners failed to meet that requirement our position is that in the context of this case we were submitting evidence that was already on the record at the commerce department in the concurrent china nails investigation is the same product so we were submitting evidence actually of the commerce department already had in its hands in those concurrent proceedings we're placing it on the record in this investigation so and goes back to the point that judge dyke was raising that that because you were just submitting that as  sort of corroborate your other submissions not as a separate matter of evidentiary consideration well your honor we think that it it it merits consideration as as evidence it was evidence that we submitted on the record particularly when the commerce department had a very imperfect options available to it in the home market in their country markets and so was i hear you but we've got have a difficult s consistent with what the correspondent was doing on this issue that is to say in october at that time in this case the congress apartment was using that statement as a as a probative and best evidence measure a honor but this is a complicated area and my understanding is that the court of international trade in other decisions is said that the pro does not have two aspects to it no one was that i want to just understand your your position is they should have used the l s i data in computing the profit cap and the fact that the l s i data was from another country doesn't mean that it's producers of it's a question is yes under the c i t cases as i understand the other country data could not be used even under the facts available theory to that's our best approach to applying account that's the hugh steel case but our focus and we think the courts focus should be on the fact that this statute has eighty over writing preference for non aberrational profit rates and rates that do reflect the foreign like products steel nails and what the cover some burma did hear or accomplishes neither one of those things and our overall position is that this  record with the up partial ellis i statement as well as the other china profit rate calculations that this agency performed as along with the home market data that the congress department also head in front of it provide  f wealth benchmarks that this agency could have relied upon in should have relied upon to ensure that it did not impose an aberrational of profit rate and in interview that's what the statute is all about both these subsections of a in the through in the three options under be for profit as well as that the cap provision we also don't want to over looked the of the the fact that the commerce department refused of what we considered be the very best evidence of homework a profit which are the sales by oman fasteners in the oman the country one hundred vest occasion of steel mills well it if think you maybe right that the five percent provision doesn't apply here  of the data and that's what the statute is is getting after here that is to say if the homework at the door small but representative of car sales represent sales that are not made to affiliates and otherwise are not deficient in in quality the quantity the quantity of volume of those sales can be quite small i don't know if we're prepared to agree if there was a single sale that that could be used if it were pay in those respects but here we had to put more and i'm not sure about what the just what the basis for the quality quantity distinction is and isn't the idea here that if the sales are even just t few in number in oman that oman fasteners could be perfectly happy living with a unduly small profit because it's going to make up for it everywhere else it does business regrew with that characterization of the profit section of the statute certainly there is a quantitative threshold in the price to price section of the statute if that is the threshold question about will the department should the bigger my i think you're probably right about the virus and not carry over to this section but with that aside and would judge from i was asking you is isn't there some relevance to the small quantity of data that's available and is that within congress his discretion to quality of circumstances of the sales the it played a bright line rule in their decision are reading those their determination is that they said this falls under five percent i don't see the administratively uses the term viable to refer to cases where the five percent test is not met under that section of the statute so there are countless cases under which congress measures the home market against the this circumstance the amount of sales were less than five percent for purposes of calculating normal value then were  strict five percent threshold but by looking at the facts and reaching a determination that there was not enough data that is making a reasonable determination that is one hundred percent correct so when you're starting with the rests on applying you are present bright morning rule or whether it is i thought you just said it rests on a more holistic determination that the data here weren't sufficient within the context of the determination made here or review of all of the data presented in this case i cannot speak to a bright line rule your honor but i can only speak within the context of the determination that w for why that is reasonable all it does is say we don't do that in and i don't think cases and we've certainly said that the fact that an agency statement of what it normally does or has done before is not the same thing an explanation of why it's reasonable and i don't see an explanation of why it's reason for saying here's what the profits of the of oman should be how do you not take into account whether high tax country has given it wheelbarrows full of money  that go into its profit making them much too h i believe that kind i don't have the record citation available to me your honor right now but i believe the commerce did speed in the issues in decision memorandum that it took into account ok but it's at forty eight sixty five dollars the appendix it's really only what two paragraphs or something and it's far as i can tell i guess i'd like to be shown why this is wrong that the only thing that commerce said is our practice is now to consider th i don't know the answer to your question your honor i believe that within the context of the statute and market economy subsidies do not have the seam red flag effect that they do and in non market economy situation anything else that i say on this matter would be speculation on my part because it is not in the issues and vision memorandum however i go further and state here that based upon the record that was before commerce that was the only reasonable evidence upon which to make a determination regarding construct a one thousand you and a construct unless other questions about that let me ask about the profit because i'm not clear about what commerce disposition is here as to whether it's appropriate under the facts available standard which you  agree is appropriate whether you can look to data outside the home market converses determination is made based upon the record that is before us and here the record that was before it did not appropriate under the facts available standard to look to data from another country and calculate the proc yes and it did so here you do think it's appropriate it calculated the profit cap is to pile on high tax information high tech is from another i cannot speak to be court of international trade pieces to which the court is referring because those cases rested upon the evidence or are the administrative records put before them for all the reasons why commerce made a determination not to use the l f data whether it was submitted in the form of partially translated financial statements or whether it was fully submitted translations oman fasteners submitted partially translated documents where substantial portions of  issue was on the table again why you should under those circumstances armors of agree to consider the late file only translated data it is not an abuse of discretion and there the reason why i mention i just want to point out the l s i transcripts in connection with constructed value is because the constructed value profit kept wallows that  so all of the reasons why commerce made a determination not to use the l s i statement for constructed value are the very same reasons that it did not use the l s i statements for purposes of profit cap commerce has a right and should in this court should find it does to have deadlines and require parties to abide them commerce has regulations that had they been employed here we might be we might not be talking about this however the circumstances presented here  that a party did not argue for something in a timely manner did not address the l s i statements until after the record had closed in fact did not attempt to provide a full transcript fully translated transcript that it apparently had access to because it was on the record in it's a very straightforward matter as she just described oman fasteners chose to employ a certain litigation strategy through the preliminary phase of the an underlying investigation whereby they argued only that congress should rely on use of their home prop profit or profit rates from other omani producers of completely different products such as corrugated boxes pipes and tubes or a construction company they submitted to the l s i financial statement in a fairly translated form  your honest have said so expressly and and they declared this for purposes of benchmarking the corroborating what they argued would be a reasonable profit rate it was only when they realized that their litigation strategy had failed then only after the fact not in the preliminary determination until that point they had never argue that it should be used in any way except as a benchmark they had access to the fully translated statement from a different perceiving they chose not to put on the record but that they didn't i would argue they didn't feel they needed to because that they were putting on the record for a subsequent purpose every every record of every proceeding stands on its own and they chose what to put on the record here and only later try similarly submit a financial state a truthful translation of a financial statement for a company called sumiko after the deadline it passed and they want congress rejected our request as well congress rejected both parties request to untimely present new factual information that is something converses purview as a matter of responsibly managing its docket you have a hotly contested active investigation of litigation commerce needs to draw lines about what to take and what not to in the case of a company who puts information on the record for a totally unrelated purpose and only after it realizes it's litigation error its failure in tactics that it tries to get the commerce department to accept it for a different purpose i think there's a sound basis for congress to exercise its discretion to reject this information and then as you do anything to get to and on the subsidy question yes your honor your commerce has a very reasonable practice of not looking beyond the financials beyond the numbers of finance them and they don't want to put the department doesn't want to put itself in the position of having to deconstruct financial statements and look behind or try to look behind the numbers the statutory such for a prohibition on avoiding subsidized you know from subsidized companies is specific to non market economy cases in a market economy case you know especially on a record like the one below where converses faced with a set of imperfect choices it was reasonable to accept the financial statement as presented so salute you seem to be saying they have a policy of refusing to consider subsidies in market economy he's that is their practice and i think but what i was actually is they have  practice also of of not trying to deconstruct financial statements and you know fix problems were just the financial statement numbers and everything is hindsight is two thousand and twenty that the record in this the record in this investigation you know contain a series of of difficult choices in a very badly developed record from the point of view on fasteners with respect to see a prophecy which is but the fact that the record the fact of the best choice on the record was high tech is is is not the commerce department's fall we put high tech on the record as the best source we could get them on fasteners failed to present information that it had access to so that should you know that is not a basis for criticizing the co the other sources on the record however there have been many cases where commerce has as and the court of international trade has has affirmed that merely because profit rate is high doesn't mean that it's aberration decision making which rests entirely rested entirely on their conclusion it under the previous statutory section of what we call viability what the department calls my ability that is to say the five percent test because in their  final decision memo they said because among fasteners did not have a viable home market and not reference in our view is a reference to that the st statutory provision the five percent test because only fasteners did not have oil market that we consider the home market sales to be too insignificant that's the word those are the words they use too insignificant to reflect what i mean would it reach that conclusion after looking at the data and concluding that there just wasn't enough data you're under a concrete conclusion was of it seems to me that a fair way to read that is not to say that they simply applied a five percent but looked at the record holistically which they should i agree your honor they should look at the record holistically our reading of his record is that on this question they looked only at the outcome of the five percent test v profit part of the statute and so we read that to mean a very mechanical right line per se application of the facts of the numbers here in this case you just won one more question on this subsidy child because we know what commerce will say not just what they do because they may be very consistently doing something on reasonable so that's just not enough but but don't we know that they will say something like what mr gordon says which is not only do we now have to look behind these you know annual statements and audit before it's and whatnot but there's a good reason we don't which is that if we did we wouldn't have the same discovery tools it would just be too difficult to beat to make a reliable determination in which case what would be the point of saying go back and say that you want to read do not think it would be futile to ask the congress department to do that particularly on the record of of this case where the high tech financial statement as compared to the other evidence on the record is so aberrational and i would because there is better evidence on the record as commerce indeed itself found in comparing these two statements in in the china in the two in this case we would argue that it should be discarded entirely but i also take issue with the commerce department and mcconnell's characterization of the department never going behind statements in fact that the reason why the congress department has insisted so strenuously that it needs full translations of these statements is just so that it can examine the statements and decide whether they're probative or whether there's something about that company and its financials that prevent or distort the data that they're looking at so that's the whole premise the department  says that it needs full translations so looking at subsidies is it should be part of the inquiry we believe and we also want to to finally note that with regard to become its point about  our objection to elite submission of a full translation on their part when we asked the commerce department to please reopen the record to permit the full translation of l s i to be put on the record we specifically said we would agree and we also urged them to open the record to have any other parties have the opportunity to submit a full translations of of what they felt was probative so it was our position that congress should have taken an even handed approach