Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01850/USCOURTS-ca13-15-01850-0/pdf.json

Parties Involved:
CS Wind Corporation
Appellant
CS Wind Vietnam Co., Ltd.
Appellant
United States
Appellee
Wind Tower Trade Coalition
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

CS WIND VIETNAM CO., LTD., 

CS WIND CORPORATION,

Plaintiffs-Appellants

v.

UNITED STATES, 

WIND TOWER TRADE COALITION,

Defendants-Appellees

______________________ 

2015-1850

______________________ 

Appeal from the United States Court of International 

Trade in No. 1:13-cv-00102-JAR, Senior Judge Jane A. 

Restani.

______________________ 

Decided: August 12, 2016 

______________________ 

NED H. MARSHAK, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York, NY, argued for 

plaintiffs-appellants. Also represented by BRUCE M.

MITCHELL; DHARMENDRA NARAIN CHOUDHARY, KAVITA 

MOHAN, ANDREW THOMAS SCHUTZ, Washington, DC; 

ANDREW SCHROTH, Hong Kong, China.

JOSHUA E. KURLAND, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, 

Washington, DC, argued for defendant-appellee United 

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2 CS WIND VIETNAM CO., LTD. v. US

States. Also represented by BENJAMIN C. MIZER, JEANNE 

E. DAVIDSON, REGINALD T. BLADES, JR. 

ROBERT E. DEFRANCESCO III, Wiley Rein, LLP, Washington, DC, for defendant-appellee Wind Tower Trade 

Coalition. Also represented by DANIEL B. PICKARD, DERICK 

HOLT, USHA NEELAKANTAN. 

______________________ 

Before PROST, Chief Judge, TARANTO and CHEN, Circuit 

Judges.

TARANTO, Circuit Judge. 

The Commerce Department determined that a Vietnamese manufacturer of wind towers was selling its 

products in the United States at about 51.5% below 

normal value, a figure that Commerce calculated using 

methods made applicable by statute when imported goods 

come from a nonmarket economy, as the wind towers at 

issue here do. The company challenges three aspects of 

Commerce’s calculation upheld by the Court of International Trade: Commerce’s selection of data to determine 

the weight of the manufacturer’s products; Commerce’s 

presumption-based premise that the company’s supplier 

received subsidies from the Korean government; and 

Commerce’s calculation of certain overhead expenses for 

inclusion in the base of costs that go into normal value. 

We reverse as to Commerce’s weight calculation; affirm as 

to Commerce’s treatment of Korean subsidies; and vacate 

and remand as to Commerce’s overhead-expense calculation. 

BACKGROUND

A 

In December 2011, the Wind Tower Trade Coalition 

petitioned the Department of Commerce to impose antidumping duties under 19 U.S.C. § 1673 et seq. on wind 

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CS WIND VIETNAM CO., LTD. v. US 3

towers imported into the United States from Vietnam. 

See Utility Scale Wind Towers From the People’s Republic 

of China and the Socialist Republic of Vietnam, 77 Fed. 

Reg. 3,440, 3,440 (Dep’t of Commerce Jan. 24, 2012). The 

Coalition alleged that such imported towers were being 

sold in the United States at less than fair value. Id. The 

Commerce Department conducted an investigation into 

whether, in particular, CS Wind Vietnam was engaged in 

such dumping.1 As relevant here, CS Wind produces 

wind towers in Vietnam and ships them in sections to the 

United States, where they are assembled and erected. 

J.A. 73; Utility Scale Wind Towers from China & Vietnam, Inv. No. 701-TA-486, 2013 WL 1155424, at *5 

(USITC Feb. 2013).

As part of its investigation, Commerce calculated the 

“normal value,” i.e., the price at which the product is sold 

or offered for sale in the exporting country. 19 U.S.C. 

§ 1677b(a)(1)(B). If the normal value exceeds the price at 

which the product is sold in the United States, and other 

required findings are made, Commerce is to make a 

finding of dumping and impose a duty based on the difference—the dumping margin. Id. §§ 1673, 1677(35)(A); see 

Dorbest Ltd. v. United States, 604 F.3d 1363, 1367 (Fed. 

Cir. 2010); Ningbo Dafa Chem. Fiber Co., Ltd. v. United 

States, 580 F.3d 1247, 1250 (Fed. Cir. 2009). In percentage terms based on export prices for the towers shipped to 

the U.S., Commerce calculated a 51.5% “weighted average 

dumping margin” for CS Wind. 19 U.S.C. § 1677(35)(B); 

Utility Scale Wind Towers From the Socialist Republic of 

Vietnam: Final Determination of Sales at Less Than Fair 

Value, 77 Fed. Reg. 75,984, 75,988 (Dep’t of Commerce 

Dec. 26, 2012) (2012 Final Determination). 

 

1 Unless context indicates otherwise, “CS Wind” in 

this opinion refers collectively to both appellants—CS 

Wind Vietnam and its parent, CS Wind Corporation. 

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4 CS WIND VIETNAM CO., LTD. v. US

It is undisputed here that Vietnam has a “nonmarket 

economy,” in which prices “do not reflect the fair value of 

the merchandise.” 19 U.S.C. § 1677(18)(A). Because CS 

Wind operated in a nonmarket economy, Commerce

calculated the normal value pursuant to 19 U.S.C.

§ 1677b(c)’s special rules for such economies. See Dorbest, 

604 F.3d at 1367 (describing such rules). Under those 

rules, Commerce was to calculate a normal value for the 

wind towers based on the “value of the factors of production utilized in producing the merchandise” plus “an 

amount for general expenses and profit plus the cost of 

containers, coverings, and other expenses”; and “the 

valuation of the factors of production” was to be “based on 

the best available information regarding the values of 

such factors in a market economy country or countries 

considered to be appropriate.” 19 U.S.C. § 1677b(c)(1). 

Commerce was to use, “to the extent possible, the prices 

or costs of factors of production in one or more market 

economy countries that are—(A) at a level of economic 

development comparable to that of the nonmarket economy country, and (B) significant producers of comparable 

merchandise.” Id. § 1677b(c)(4). The object, under that 

approach, is “to construct a hypothetical normal value for 

the merchandise that is uninfluenced by the nonmarket 

economy.” Jiaxing Brother Fastener Co. v. United States, 

822 F.3d 1289, 1292 (Fed. Cir. 2016); see Downhole Pipe & 

Equip., L.P. v. United States, 776 F.3d 1369, 1375 (Fed. 

Cir. 2015). Here, Commerce used “surrogate values” from 

India, a market economy, to calculate values for various

elements of the normal value of CS Wind’s towers. J.A. 

1298–99.

Three of Commerce’s determinations are pertinent to 

the present appeal. First, after translating certain Indian 

prices into U.S. dollars per kilogram, Commerce had to 

multiply that per-kilogram price by the weight (in kilograms) of the CS Wind components. In arriving at the

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CS WIND VIETNAM CO., LTD. v. US 5

weight of CS Wind’s products, Commerce decided not to 

use the weights CS Wind reported for its various factors 

of production. Instead, it used the weights indicated on 

certain packing slips prepared by one of CS Wind’s customers for the necessary transocean shipping of the 

sections of the towers. J.A. 126–27. CS Wind challenges 

that decision.

Second, for certain components, i.e., flanges, welding 

wire, and wire flux inputs, CS Wind asked Commerce to 

use the actual prices CS Wind paid for them when buying 

them from a manufacturer in Korea—a market economy. 

Commerce denied the request. Based on a determination 

in earlier proceedings that certain goods exported from 

Korea are eligible for subsidies, Commerce presumed that 

CS Wind’s purchases benefited from such subsidies, and it 

then found that CS Wind had provided insufficient evidence to rebut the presumption. J.A. 65–68. Commerce 

therefore used Indian surrogate values for the prices of 

those components, rather than the prices CS Wind actually paid. CS Wind challenges that decision.

Third, Commerce used the financial statements of an 

Indian company, Ganges International, which sells identical and comparable wind towers, J.A. 50, to calculate the 

required contribution to normal value from, in particular,

“general expenses,” 19 U.S.C. § 1677b(c)(1)—here, overhead, selling, general, and administrative expenses

(which, following Commerce’s usage, we call “overhead” 

for short). J.A. 220–21. One of the Ganges-reported 

expense line items that Commerce included in overhead 

was “Jobwork Charges (including Erection and Civil 

Expenses).” J.A. 737, 204. The following meanings of 

those terms are not disputed before us. Firm A incurs 

“jobwork” expenses when it pays Firm B to provide manufacturing services for A (presumably, therefore, working 

with raw materials A has supplied to B), with the resulting manufactured goods then transferred to A for A to 

sell. In the wind-tower setting, “erection and civil” exCase: 15-1850 Document: 74-2 Page: 5 Filed: 08/12/2016
6 CS WIND VIETNAM CO., LTD. v. US

penses are payments for preparing the foundation on 

which to set a tower (“civil”) and for setting up the tower 

on the foundation (“erection”)—which we infer are payments to outsiders where, as here, they are listed as 

“includ[ed]” in “jobwork.” See CS Wind Br. 49 (quoting 

J.A. 1712); U.S. Br. 7 n.2; J.A. 221, 740. (We may refer to 

the two activities together as “tower setup.”)

CS Wind asked Commerce to reduce the 212,380,751 

rupee figure for those jobwork expenses by certain income 

amounts for what CS Wind alleges are corresponding 

items, namely, “Erection income” (90,856,566 rupees) and 

“Civil income” (51,931,347 rupees)—totaling 142,787,913 

rupees—which Ganges reported as income separate from 

the income from its “Sales.” J.A. 733. CS Wind’s request 

would have resulted in including only 69,592,838 rupees 

of Jobwork Charges in overhead (212,380,751 minus 

142,787,913), but Commerce denied the request. Instead, 

it reduced the “Jobwork Charges (including Erection and 

Civil Expenses)” only by the tiny amount (2,085,029

rupees) of Ganges-reported income for “Sales – Jobwork,”

J.A. 736.2 Commerce thus included 210,295,722 rupees of 

“Jobwork Charges (including Erection and Civil Expens-

 

2 Given the undisputed meaning of “Jobwork 

Charges,” “Sales – Jobwork” would seem to refer to Ganges-performed manufacturing services for other firms, 

which would then sell the resulting merchandise, not to 

Ganges-purchased manufacturing services from other 

firms involving merchandise that Ganges would then sell. 

It is not apparent how the two “jobwork” items could 

relate to the same units or why the Ganges-performed 

jobwork should affect the amount of overhead expenses 

for Ganges-sold units. Although Commerce later changed 

its approach to the overhead issue in various ways, it 

“continue[d] to permit an offset for the full amount of 

income generated from sales of jobwork.” J.A. 214 n.41. 

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CS WIND VIETNAM CO., LTD. v. US 7

es)” as overhead in calculating normal value. See J.A. 

221–22. 

In response to CS Wind’s challenge to that decision in 

the present litigation, Commerce eventually adopted a 

different approach to deciding what amount of the “Jobwork Charges (including Erection and Civil Expenses)” to 

include in overhead. In some but not all of its descriptions, Commerce characterized its new approach as trying, like CS Wind’s approach, to exclude from overhead 

costs the portion of the “Jobwork Charges (including 

Erection and Civil Expenses)” line item that were tied to 

erection and civil income. J.A. 161, 175. But whereas CS 

Wind did so by simply subtracting the “Erection income” 

and “Civil income” amounts, Commerce sought to achieve 

a similar goal by a more complex ratio calculation, using 

certain aspects of the income and expense sides of the 

financial statements. Commerce’s final approach reduced 

the 212,380,751 rupees of “Jobwork Charges (including 

Erection and Civil Expenses)” by 8.62%. J.A. 209. The 

result was to include more than 194,000,000 rupees from 

the Jobwork Charges line item as overhead, far more than 

the roughly 70,000,000 rupees CS Wind urged. CS Wind 

challenges Commerce’s final approach to this aspect of the 

normal-value calculation.

B 

In August of 2012, Commerce published a preliminary 

determination that CS Wind had engaged in dumping. 

Utility Scale Wind Towers From the Socialist Republic of 

Vietnam: Preliminary Determination, 77 Fed. Reg. 

46,058, 46,058 (Dep’t of Commerce Aug. 2, 2012). In 

December of that year it made certain modifications and 

made its dumping determination final. 2012 Final Determination, supra. After the International Trade Commission determined under 19 U.S.C. § 1673d(b) that a 

U.S. industry was materially injured or threatened with 

material injury by imports of wind towers from Vietnam,

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8 CS WIND VIETNAM CO., LTD. v. US

Commerce published an amended final determination, 

correcting ministerial errors in its 2012 final determination. Utility Scale Wind Towers From the Socialist Republic of Vietnam: Amended Final Determination of Sales 

at Less Than Fair Value and Antidumping Duty Order, 

78 Fed. Reg. 11,150 (Dep’t of Commerce Feb. 15, 2013). 

CS Wind filed an action in the Court of International 

Trade challenging Commerce’s determination under 19 

U.S.C. § 1516a(a)(2) & (b)(1)(B)(i) and 28 U.S.C. § 1581(c). 

As relevant here, the Court of International Trade on 

March 27, 2014, affirmed in part and remanded in part. 

J.A. 100–40. It affirmed Commerce’s use of the packingweight figures rather than the component weights CS 

Wind reported. J.A. 126–27. It also affirmed Commerce’s 

determination not to use the Korean prices for certain 

components. J.A. 137. But it remanded on the issue of

jobwork expenses, holding that if Commerce, using the 

Ganges financial statements, were to account for the 

reported jobwork charges including erection and civil 

expenses, it must also account for the reported erection 

income and civil income. J.A. 123–24. In particular, the 

court ruled that the two must be “treated similarly under 

Commerce’s practice, either including both as overhead or 

excluding both from the calculation, unless Commerce 

explains why different treatment is warranted.” J.A. 124. 

On remand, Commerce issued a determination on July 29, 2014. J.A. 145–81. It abandoned its initial inclusion of all jobwork charges, including civil and erection 

expenses, in favor of a new approach that Commerce here 

describes as attempting to exclude “the proportion of the 

jobwork expenses relating to erection and civil activities, 

so that jobwork expenses and associated income were 

treated consistently.” U.S. Br. 10; see J.A. 160–62, 175–

78. On review, the Court of International Trade on November 3, 2014, again remanded. J.A. 183–99. It concluded that “Commerce is still treating expense and 

income line items differently without stating an acceptaCase: 15-1850 Document: 74-2 Page: 8 Filed: 08/12/2016
CS WIND VIETNAM CO., LTD. v. US 9

ble reason,” and it required “recalculation or further 

explanation.” J.A. 196–97. On January 20, 2015, Commerce issued its Final Redetermination, fundamentally 

following its initial redetermination approach but making 

some modifications. J.A. 203–16. This time, the Court of 

International Trade affirmed, producing a final judgment. 

J.A. 218–34.

We have jurisdiction to hear CS Wind’s appeal under 

28 U.S.C. § 1295(a)(5).

DISCUSSION

A 

We begin with CS Wind’s challenge to the calculation 

of the weight of its products. In determining the weight of 

the CS Wind products (to be multiplied by the surrogate 

per-kilogram values), Commerce had available two

sources of information: CS Wind’s listing of the components of the wind towers and their weights, produced to 

and verified by Commerce during the investigation, J.A. 

124–25, 317–43; and packing slips containing customersupplied (not manufacturer-supplied) weight estimates for 

tower sections to provide center-of-gravity information for 

the transocean shipping, J.A. 835, see J.A. 56–57. Commerce chose to use the weights reflected on the packing 

slips, J.A. 55–57, which were higher than the weights CS 

Wind reported for the components, J.A. 1341. The choice 

of higher weights increased the calculated “normal value” 

and, therefore, the dumping margin and the duty. 

Commerce does not dispute that, in this decision, it 

was seeking to use the best available evidence for an 

accurate assessment. See Shakeproof Assembly Components, Div. of Illinois Tool Works, Inc. v. United States, 

268 F.3d 1376, 1382 (Fed. Cir. 2001) (“In determining the 

valuation of the factors of production, the critical question 

is whether the methodology used by Commerce is based 

on the best available information and establishes antiCase: 15-1850 Document: 74-2 Page: 9 Filed: 08/12/2016
10 CS WIND VIETNAM CO., LTD. v. US

dumping margins as accurately as possible.”); see Ningbo 

Dafa, 580 F.3d at 1257 (same). Commerce necessarily 

decided, therefore, that the packing lists provided more 

accurate information about weight than did CS Wind’s 

records. The question before us is whether that determination is supported by substantial evidence. 19 U.S.C. 

§ 1516a(b)(1)(B)(i); see F.lli De Cecco Di Filippo Fara S. 

Martino S.p.A. v. United States, 216 F.3d 1027, 1031 (Fed. 

Cir. 2000). 

Substantial evidence “means such relevant evidence 

as a reasonable mind might accept as adequate to support 

a conclusion.” Universal Camera Corp. v. N.L.R.B., 340 

U.S. 474, 477 (1951). “The substantiality of evidence 

must take into account whatever in the record fairly 

detracts from its weight.” Gerald Metals, Inc. v. United 

States, 132 F.3d 716, 720 (Fed. Cir. 1997) (internal quotations omitted, alterations in original). Here, the question 

is whether the record supplies a basis for Commerce 

reasonably to find that the packing-weight information 

was more accurate than the CS Wind component-weight 

information. We conclude that Commerce has not provided a sufficient basis for using the packing weights rather 

than the component weights reported by CS Wind. 

CS Wind documented the sources, including commercial invoices, for the weights it reported to Commerce, J.A. 

822, 824, 827, and Commerce verified those figures to the 

extent it deemed necessary (making certain adjustments).3 On the other hand, Commerce “acknowledge[d] 

 

3 Commerce followed verification procedures to examine the reported weights pursuant to 19 U.S.C. 

§ 1677m(i). It recalculated CS Wind’s calculation of its 

components’ weights using CS Wind’s theoretical weight 

values, J.A. 822, 847; traced the consumption of components for the period under investigation to CS Wind’s 

inventory ledger, J.A. 823; and traced the reported 

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CS WIND VIETNAM CO., LTD. v. US 11

that the packed weights are based on certain estimations,” J.A. 58; U.S. Br. 21 (“It is undisputed that Packed 

Weight is an estimated weight.”), made by customers, not 

the manufacturer. “Commerce determined that the total 

Packed Weight of a section is based on center-of-gravity 

calculations provided by CS Wind’s customers for purposes of optimally positioning the wind tower section on the 

shipping vessel to maintain correct balance.” U.S. Br. 18, 

citing J.A. 57, 835. 

In nevertheless choosing the customer-estimated figures over the manufacturer-reported, Commerce-verified 

ones, Commerce gave what amounts to a single reason—

which, we conclude, lacks the evidentiary support that 

would be required in order for it to justify choosing the 

packing weights. Commerce stated that it was “unreasonable to assume that the weight of the wind tower 

section recorded in the packing lists is so grossly overestimated as to chance the misplacement of the wind tower 

section on a shipping vessel and risk an imbalance of the 

vessel or rolling of the tower section in transit.” J.A. 57

(emphasis added; footnote citing J.A. 1341 omitted); see 

J.A. 58 (“considering the importance of the use of the 

packed weight for shipping purposes, it is not unreasonable to assume that the packed weights and the [component] weights should be similar”). In this court, 

Commerce confirms what the italicized phrase indicates: 

the basis of Commerce’s choice was the “material extent of 

the discrepancy between the two weights” (the packing 

weights and the component weights). U.S. Br. 22 (emphasis added). Underscoring the centrality to Commerce’s rationale of the size of the weight discrepancy, 

Commerce states three times that the packed-list weight 

 

weights of some components to technical drawings, J.A. 

805. Commerce did not itself weigh CS Wind’s components. J.A. 125.

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12 CS WIND VIETNAM CO., LTD. v. US

for “the internal components” was “nearly double” CS 

Wind’s reported weight for those components. U.S. Br. 

13, 18, 22.

The problem with that basis grows out of the fact that 

the doubling is only of a very small fraction—the “internal 

components”—of the overall tower weights. As the Commerce-cited J.A. 1341 indicates, the entire weight discrepancy between the CS Wind figures and the packinglist figures lies in the internal components, and that 

discrepancy as a percent of the weight of the overall 

towers is less than 4%. But there is no evidence that 

either (a) a mere 4% difference in overall weight or (b) the 

specific difference in weight figures for the small internalcomponents portion of the towers would make a difference 

in maintaining balance on the vessels used for transportation here. And we have no basis for thinking that either 

premise is a matter of common knowledge or otherwise 

can be presumed true without evidence. In the absence of 

such evidence, there is no reasonable basis for Commerce’s conclusion that it should assume that the packing-list weight is more accurate because the shippingbalance purpose demanded the assumption.

Because the reason Commerce offers for using the 

packed weights is without record support, we find Commerce’s choice to be unsupported by substantial evidence. 

We therefore reverse the Court of International Trade’s 

affirmance of that choice and direct Commerce to use the 

manufacturer-reported weights in its calculation. 

B 

We turn next to the issue of Korean subsidies. CS 

Wind purchased three categories of components from a 

supplier in Korea and exported those components to 

Vietnam. J.A. 65. Under the statute, if Commerce determines that “broadly available export subsidies existed” 

with respect to such a foreign purchase, Commerce may 

“disregard” the presumably subsidized prices, using 

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CS WIND VIETNAM CO., LTD. v. US 13

surrogate values to calculate normal value instead. 19 

U.S.C. § 1677b(c)(5). Here, Commerce relied on previous 

determinations to find that Korea maintains “broadly 

available, non-industry-specific export subsidies.” J.A. 65, 

1510 n.3. Commerce ultimately relied on that basis to 

reject use of CS Wind’s Korean purchase prices and use 

surrogate values instead. J.A. 66. In this court, CS Wind 

has not challenged Commerce’s conclusion that export 

subsidies are generally available, so we simply accept that 

conclusion here, without reviewing its basis. CS Wind Br. 

33–40. But CS Wind contends that the evidence required 

Commerce to find that no subsidies affected CS Wind’s 

particular purchases and therefore to use the actual 

prices CS Wind paid for those items, not surrogate values 

for those items, in the calculation of normal value. The 

Korean prices are lower than the surrogate values, so 

using them would lower the “normal value” and hence the 

dumping margin and resulting duties. 

Commerce relied on the generally available Korean 

subsidies to reject use of the Korean prices, concluding

that it had a reasonable basis to believe or suspect that 

CS Wind’s purchases of flanges, welding wire, and wire 

flux benefited from such subsidies and that CS Wind did 

not persuasively show there was in fact no such benefit. 

J.A. 65–68. Nothing in the statute precludes that approach to choosing whether to use surrogate values or 

particular market purchases here. Indeed, the statute 

states that Commerce “may disregard price or cost values 

without further investigation if the administering authority has determined that broadly available export subsidies 

existed.” 19 U.S.C. § 1677b(c)(5); see also H.R. REP. NO. 

100-576, at 590–91 (1988) (Conf. Rep.) (“In valuing [the 

factors of production], Commerce shall avoid using any 

prices which it has reason to believe or suspect may be 

dumped or subsidized prices. However, the conferees do 

not intend for Commerce to conduct a formal investigation 

to ensure that such prices are not dumped or subsidized, 

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14 CS WIND VIETNAM CO., LTD. v. US

but rather intend that Commerce base its decision on 

information generally available to it at that time.”). And 

we have been given no basis on which to conclude that 

this approach, essentially a presumption-based approach, 

is an unreasonable way of implementing the statute.

Thus, with CS Wind not challenging Commerce’s finding that subsidies were available for export transactions

in Korea, Commerce reasonably required CS Wind to 

demonstrate that it received no subsidies for the particular purchases in question. See Hangzhou Spring Washer 

Co. v. United States, 387 F. Supp. 2d 1236, 1248 (Ct. Int’l 

Trade 2005); Luoyang Bearing Corp. v. United States, 347 

F. Supp. 2d 1326, 1342 (Ct. Int’l Trade 2004). We conclude that substantial evidence supports Commerce’s

conclusion that CS Wind did not make its case. 

CS Wind has relied on the following bases for its contention that its purchases did not benefit from the Korean 

export subsidies: a statement from a Finance Manager 

stating that CS Wind itself had not received subsidies on 

the purchase in question, J.A. 673; emails from two 

individuals at two vendors—one a “Deputy General 

Manager/Team Leader, Sales & Marketing team,” the 

other a Product Manager—both emails indicating that the 

vendors did not apply for or receive export subsidies, J.A. 

675, 677; and the contention that the initial purchase of 

the components at issue here was made by CS Wind 

Corporation, a Korean company that owns CS Wind 

Vietnam (to which they were then shipped), and the 

Korean parent was not eligible for any export subsidies. 

CS Wind Br. 38–41. 

Commerce could reasonably reject CS Wind’s case as 

not comprehensive or definitive enough, at least in light of 

other evidence, to show that subsidies did not affect the 

purchases at issue. The generally available subsidies 

were for exports. Commerce cites several Certificates of 

Origin that, while listing CS Wind Vietnam as the “ConCase: 15-1850 Document: 74-2 Page: 14 Filed: 08/12/2016
CS WIND VIETNAM CO., LTD. v. US 15

signee,” list CS Wind’s supplier as the “Exporter,” which 

therefore could well have taken advantage of export 

subsidies. A box labeled “Declaration by the Exporter” is 

signed by the supplier, not by CS Wind Vietnam. And 

several invoices list CS Wind Corp. in Korea, not CS Wind 

Vietnam, as the “Shipper/Exporter.” The parent corporation could have taken advantage of the export subsidies. 

An invoice and a certificate of inspection, though showing 

the product as being purchased by CS Wind’s Korean 

parent, referred to the “MidAmerican (Vietnam)” project, 

perhaps indicating that the manufacturer was aware that 

the product was destined for Vietnam. And “Certificate[s] 

of Material” from the supplier list the customer not as CS 

Wind Corp. in Korea, but as CS Wind, Ltd., i.e., the 

Vietnamese company.

This issue required a judgment about evidence. 

Commerce reasonably made that judgment, finding that 

CS Wind did not demonstrate that the purchases at issue 

were unaffected by the generally available export subsidies in Korea. Commerce could therefore choose to use 

surrogate values for those components of the wind towers, 

rather than the prices of the Korean purchases.

C 

Finally, we consider CS Wind’s challenge to Commerce’s determination of how much of the “Jobwork 

Charges (including Erection and Civil Expenses)” line 

item on the Ganges financial statements to include as 

overhead expenses. CS Wind challenges (a) Commerce’s 

rejection of its proposal simply to subtract from the 

amount of that expense line item the income line items for 

“Erection income” and “Civil income” and (b) Commerce’s 

ultimate adoption instead of a complicated alternative 

approach. We conclude that a further remand is needed, 

because Commerce has failed to meet its obligation to set 

forth a comprehensible and satisfactory justification for 

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16 CS WIND VIETNAM CO., LTD. v. US

its approach as a reasonable implementation of statutory 

directives supported by substantial evidence. 

1 

Under the review provision invoked by the parties, we 

are obliged to set aside Commerce’s determination if 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). To fulfill that obligation, we insist 

that Commerce “examine the record and articulate a 

satisfactory explanation for its action.” Yangzhou Bestpak 

Gifts & Crafts Co., Ltd. v. United States, 716 F.3d 1370, 

1378 (Fed. Cir. 2013). Although we uphold “a decision of 

less than ideal clarity if the agency’s path may reasonably 

be discerned,” Bowman Transp., Inc. v. Arkansas-Best 

Freight Sys., Inc., 419 U.S. 281, 286 (1974), the required 

explanation must reasonably tie the determination under 

review to the governing statutory standard and to the 

record evidence by indicating what statutory interpretations the agency is adopting and what facts the agency is 

finding. Such an explanation enables us to fulfill our 

review function and also to avoid making choices reserved 

to the agency, i.e., to avoid violating the principle of SEC

v. Chenery, 318 U.S. 80, 88 (1943), under which a reviewing court “may not affirm on a basis containing any element of discretion—including discretion to find facts and 

interpret statutory ambiguities—that is not the basis the 

agency used, since that would remove the discretionary 

judgment from the agency to the court.” ICC v. Brotherhood of Locomotive Eng’rs, 482 U.S. 270, 283 (1987). 

In another case in which we remanded to Commerce 

for a more satisfactory explanation, we explained that it is

necessary for Commerce to explain the factual settings for the calculations at issue, and explain exactly how those calculations are made. The 

antidumping statute is highly complex and often 

confusing, and we accordingly rely on Commerce 

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CS WIND VIETNAM CO., LTD. v. US 17

in its antidumping determinations to make sense 

of that statute. The more complex the statute, the 

greater the obligation on the agency to explain its 

position with clarity. If the Court of International 

Trade and this court are to play their statutorily 

required roles in reviewing Commerce’s determinations, it is important that we have clear guidance from Commerce as to what is actually 

happening. [¶] Once Commerce explains its actual methodology for the calculation of constructed 

value profit, it should explain why its methodology comports with the statute.

SKF USA, Inc. v. United States, 263 F.3d 1369, 1382–83 

(Fed. Cir. 2001); see Pension Benefit Guar. Corp. v. LTV 

Corp., 496 U.S. 633, 654 (1990) (reading precedent as 

“mandating that an agency take whatever steps it needs 

to provide an explanation that will enable the court to 

evaluate the agency’s rationale at the time of decision”); 

Burlington Truck Lines, Inc. v. United States, 371 U.S. 

156, 167–68 (1962); see also NMB Singapore Ltd. v. 

United States, 557 F.3d 1316, 1320 (Fed. Cir. 2009); 

Timken U.S. Corp. v. United States, 421 F.3d 1350, 1354–

57 (Fed. Cir. 2005) (discussing 19 U.S.C. § 1677f(i)).

Two aspects of this requirement are worthy of particular note here. First, an agency’s “experience and expertise” (U.S. Br. 45) presumably enable the agency to 

provide the required explanation, but they do not substitute for the explanation, any more than an expert witness’s credentials substitute for the substantive 

requirements applicable to the expert’s testimony under 

Fed. R. Evid. 702, see Carnegie Mellon Univ. v. Marvell 

Technology Group, Ltd., 807 F.3d 1283, 1302–03 (Fed. 

Cir. 2015). The requirement of explanation presumes the 

expertise and experience of the agency and still demands 

an adequate explanation in the particular matter. See 

Burlington Truck Lines, 371 U.S. at 167–68. Second, an 

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18 CS WIND VIETNAM CO., LTD. v. US

agency’s statement of what it “normally” does or has done 

before (e.g., J.A. 160, 1422) is not, by itself, an explanation 

of “why its methodology comports with the statute.” SKF 

USA, 263 F.3d at 1383. Whether it does so in a particular 

agency decision or in a cited earlier decision, the agency 

must ground such a normal or past practice in the statutory standard.

2 

In this case, Commerce has not provided the needed 

explanation setting forth the interpretations and evidence-based factual findings that establish the required 

connection from statute to determination. We remand for 

Commerce to provide that A-to-Z explanation. Here we 

identify some of the uncertainties that we are left with 

upon reading what Commerce has said so far. We do not 

intend this recitation to be comprehensive or to suggest 

the absence of simple ways of resolving them. The task 

on remand is for Commerce to lay out a reasoned grounding, in the statute and evidence, for whatever choice it 

ends up making about what portion of “Jobwork Charges 

(including Erection and Civil Expenses)” to include in 

overhead in calculating the normal value of the wind 

towers at issue.

We begin with the legal source of the authority Commerce is exercising in imposing duties on the imports

here, based on calculations of normal value, 19 U.S.C. 

§ 1677b(c). Commerce does not appear to dispute that the 

statute should be interpreted in accordance with a simple 

core idea: expenses should be included in calculating 

normal value for the merchandise at issue only to the 

extent one would expect a fair sales price for that merchandise to be set to recoup such expenses, so that expenses separately recouped by income other than receipts 

from selling that merchandise should not be built into the 

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CS WIND VIETNAM CO., LTD. v. US 19

“normal value” of the merchandise.4 If Commerce has a 

different statutory interpretation, it should articulate and 

justify it on remand. The analysis of what expenses 

should be included in overhead should then be carefully 

justified in terms of the adopted statutory interpretation.

As to the particular expenses at issue here: CS Wind’s 

consistently promoted option is simply to subtract the 

erection and civil income from the expense line item that 

includes erection and civil expenses. As we currently 

understand the matter, one possible scenario supporting 

that position would be the following: Ganges does essentially no tower setup through its own employees but hires 

subcontractors for all such work (erection and civil activities), pays the subcontractors (incurring erection and civil 

expenses), and then charges its tower customers for such 

setup (receiving erection and civil income). If that were 

an accurate description of how Ganges conducts its business, the case for CS Wind’s subtraction approach, with a 

possible small adjustment, would seemingly be strong. 

Ganges would be getting paid for all of its tower-setup 

expenses separately from what it receives in selling the 

towers at issue, so one would not expect that a fair sales 

price of the towers would be set to recoup those expenses. 

 

4 The apparent underlying idea is recited in a closely related context by the 1994 Statement of Administrative Action (which Congress deemed “authoritative,” 19 

U.S.C. § 3512(d)): “a fair sales price would recover [selling, general, and administrative] expenses and would 

include an element of profit,” and “as a general 

rule . . . Commerce will base amounts for [selling, general, 

and administrative] expenses and profit only on amounts 

incurred and realized in connection with sales in the 

ordinary course of trade of the particular merchandise in 

question.” H.R. REP. NO. 103-316, at 839 (1994), reprinted 

in 1994 U.S.C.C.A.N. 4040, 4175. 

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20 CS WIND VIETNAM CO., LTD. v. US

And the tower-setup income amount would correspond to 

the expense amount being recouped separately from the 

tower-sale price (with a possible adjustment to account 

for, say, a contractor’s markup by Ganges). 

Aspects of the Ganges financial statements are relevant to the likelihood of that scenario or some variant. As 

to separate billing, Ganges states that “Erection of Steel 

Structures is recognised on completion of individual 

erection activity & Civil contracts are recognised on 

Percentage of completion method.” J.A. 740. As to subcontracting, the wording of “Jobwork Charges (including 

Erection and Civil Expenses)” carries a strong implication

on its face: if jobwork charges are payments to outsiders, 

as appears undisputed, the “includ[ed]” erection and civil 

expenses would seem to be payments to outsiders as well, 

as appellee Wind Tower Trade Coalition argued to Commerce. J.A. 1539 (“ ‘Jobwork [Charges] (including Erection and Civil Expense)’ reasonably only includes 

payments to third party contractors for their labor.”). 

That does not necessarily mean that all of the tower-setup 

income is for subcontracted-out activity, but the rupee 

amounts are consistent with that scenario: the roughly 

140,000,000 rupees of erection and civil income could 

represent a pass-through (plus markup) of a substantial 

share of the roughly 212,000,000 rupees of jobwork expenses Ganges incurred (say, roughly 127,000,000 plus a 

10% markup). In addition, as Commerce has noted, J.A. 

207; U.S. Br. 46, Ganges says in its financial statement 

that it “is primarily engaged in Manufacturing & Trading 

activities and geographically operating in Domes[ti]c as 

well as export market,” J.A. 741—which is at least consistent with the idea that Ganges subcontracts out all 

tower-setup work and does not perform any itself. 

The methodology Commerce ultimately settled on 

seems to reject any scenario in which more than a small 

fraction of the Ganges tower-setup income represents 

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CS WIND VIETNAM CO., LTD. v. US 21

outsourced tower-setup work (Commerce reduced the 

212,380,751 rupee expense item by 18,307,221 rupees, 

about 13% of the tower-setup income of 142,787,913

rupees). If Commerce thinks practically all subcontractor-cost-pass-through scenarios for tower setup are unlikely to match reality for Ganges, we are uncertain as to 

precisely why. If Commerce thinks that it simply cannot 

tell how much tower-setup work Ganges does in-house

rather than through subcontractors, it would seem relevant to weigh uncertainties about the role Ganges plays 

in tower setup against any uncertainties seemingly built 

into the more complicated methodology Commerce adopted.

Under that methodology, Commerce undertook to include as overhead all but some tower-setup-related percentage of the 212,380,751 rupees listed for “Jobwork 

Charges (including Erection and Civil Expenses).” To 

determine what percentage to exclude from the 

212,380,751 rupee expense figure, Commerce turned its 

attention to the income side of the Ganges financial 

statements. It determined “all of the income items reflected in Ganges’ financial statements that can reasonably be associated with jobwork” and “the percentage that 

erection/civil income represents” of that amount, i.e., it 

calculated a ratio of erection/civil income to “the total 

income that can be reasonably associated with jobwork.” 

J.A. 161. As to what income items belong in the denominator of that income ratio, Commerce finally settled on

three items in addition to erection and civil income themselves (90,856,566 rupees and 51,931,347 rupees): sales of 

jobwork (2,085,029 rupees), sales of finished goods 

(1,440,021,110 rupees), and (what we understand to be 

sales of) scrap (62,484,632 rupees). J.A. 206–08, 733, 736.

The dominant figure in that income ratio plainly is the 

sale of finished goods. 

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22 CS WIND VIETNAM CO., LTD. v. US

Commerce then adjusted the income ratio in a way 

that made essentially no difference in the resulting ratio. 

It stated that, except for the (tiny) sales-of-jobwork item, 

the income from all the just-mentioned items not only 

could be “associated with jobwork” but also “relates to raw 

materials and direct labor.” J.A. 209. On that basis, 

Commerce reduced each included income item (except 

sales of jobwork) in a way that sought to exclude “the 

amount of revenues associated with raw materials and 

labor.” J.A. 215. To do that, Commerce turned back to 

the expense side of the Ganges financial statements and 

calculated the ratio of “the sum of raw materials and 

direct labor expenses” to “the sum of Ganges’ raw materials, direct labor, energy, and manufacturing overhead 

expenses.” J.A. 215. That ratio was 82.03%. Commerce 

then used the residue of that number—namely, 17.97%—

and multiplied each item in the income ratio except for 

sales of jobwork, both numerator and denominator, by 

17.97%. See J.A. 215. Because the sales-of-jobwork figure 

is so small, and every other figure in the income ratio was

multiplied by the same number, this barely changed the 

resulting income ratio—which became 8.62%. Commerce 

then multiplied 8.62% by the 212,380,751 rupees listed for 

“Jobwork Charges (including Erection and Civil Expenses)” and subtracted that amount (18,307,221 rupees) from 

212,380,751 rupees. J.A. 215. That calculation produces 

a final figure of just over 194,000,000 rupees from that 

line item to include as overhead expenses in the calculation of normal value.5

 

5 In describing what figure it was multiplying by 

8.62%, Commerce referred to 212,830,862, not to 

212,380,751 (the correct figure); but the stated result 

(18,307,221) makes clear that Commerce used the correct 

figure. J.A. 215. We note, too, that the formulas set out 

in the Court of International Trade’s final opinion, J.A. 

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CS WIND VIETNAM CO., LTD. v. US 23

Commerce’s explanation for its approach is not satisfactory. Commerce has not clearly explained the logic, in 

terms keyed to the statute, of turning to the income side 

of the financial statements and using a (particular) ratio 

of certain income items as a way of apportioning the 

expense item at issue, “Jobwork Charges (including 

Erection and Civil Expenses).” Moreover, when saying 

what it was doing, Commerce said that it was trying to 

discern the amount of the Jobwork Charges tied to, variously, erection and civil “income,” “activities,” or “expenses.” E.g., J.A. 161, 175, 176, 205, 207. The differing 

formulations can refer to Ganges-performed tower setup, 

Ganges-purchased tower setup, or both, but Commerce 

was not clear in making those distinctions. Commerce 

was likewise unclear when it referred to identifying 

income items that “can be reasonably associated with 

jobwork,” J.A. 161, 205, since it did not say whether 

“jobwork” referred to Ganges-performed services sold to 

others or Ganges-purchased services bought from others. 

Because Commerce is not clear in each “erection and civil” 

and “jobwork” reference who is doing, selling, and buying 

what, it is difficult to follow Commerce’s logic.6

We are uncertain, too, about the justification for using 

a single loose standard asking what “can be reasonably 

associated with” jobwork (for Ganges or perhaps by Gan-

 

225 nn.5–7, describe multiplication by 82.03%; but Commerce’s calculation, J.A. 215, implies that Commerce 

actually multiplied by 1–82.03%=17.97%. 

6 As already noted, we are perplexed by Commerce’s inclusion of “sales of jobwork” as an income item if 

Commerce was focusing on what income items are tied to 

jobwork that Ganges purchased (to make merchandise it 

ultimately sold). Ganges-purchased jobwork and Gangessold jobwork seem to involve separate units, one ultimately sold by Ganges, the other not. See note 2, supra. 

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24 CS WIND VIETNAM CO., LTD. v. US

ges) in making all-or-nothing decisions about whether to 

build certain categories of income into the income ratio. 

The two main “sales” items (finished goods and scrap) and 

the tower-setup income items might well differ greatly in 

how much they realistically involve (someone’s) jobwork. 

Our uncertainty extends to the justification for the expense-based ratio that Commerce calculated to multiply 

against all but one item in the income ratio before arriving at the income ratio (used finally to reduce the Jobwork Charges line item). More explanation is needed not 

only of why that particular expense-based ratio serves to 

capture some proper portion of the items in the income 

ratio, but also of why it is proper to use the same expensebased ratio for all such items.

We have been illustrative, not exhaustive, in identifying our concerns. On remand, Commerce’s task is not to 

provide isolated responses to our concerns. It is to provide 

a coherent, full explanation of a final overhead determination, laying out and justifying each step so that not only 

are our concerns addressed but, more broadly, we may see 

how the ultimate result is grounded in a justified statutory interpretation and the evidence of record.

We note here a particular legal issue that warrants 

more attention from Commerce. In this proceeding, faced 

with the task of trying to interpret the financial statements of non-party Ganges, Commerce said that it “cannot go behind” those statements, U.S. Br. 42; J.A. 206, 

175—that it “will only seek information from within the 

surrogate financial statements,” J.A. 175. We understand

Commerce to mean that it lacks authority even to ask 

Ganges for information, even if Ganges is free to decline 

to provide the requested information and no matter how 

important, simple, or objective the information might be. 

On remand, Commerce should set out a legal justification 

for that stated constraint on its question-asking authority 

or correct our understanding of what Commerce has said 

it cannot do. If Commerce concludes that it does have 

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CS WIND VIETNAM CO., LTD. v. US 25

authority to make inquiries of Ganges, Commerce should 

explain why it is reasonable to refrain from making them, 

generally or in this particular matter. In so ordering, we 

are seeking explanations, not prejudging their legal 

soundness.7

We reiterate that we are not here prescribing the 

proper overhead-expense calculation, generally or in this 

matter. Nor are we ruling that Commerce’s current result 

is incorrect—that it cannot be properly justified. We are 

remanding because we conclude that Commerce has not 

explained its determination sufficiently to allow us to 

conduct the judicial review to which CS Wind is entitled

to ensure that the agency’s exercise of power adheres to 

the authorizing law and respects the record evidence. 

CONCLUSION

We reverse the Court of International Trade’s affirmance of Commerce’s use of packing weights rather than 

component weights in its calculation of surrogate values. 

We affirm the Court of International Trade’s affirmance of 

Commerce’s determination not to use Korean purchase 

prices for flanges, welding wire, and wire flux. We vacate 

the Court of International Trade’s affirmance of Commerce’s overhead determination with respect to jobwork 

charges, erection expenses, and civil expenses. We direct 

the Court of International Trade to remand the matter 

 

7 We note that the Supreme Court has made clear 

that an agency’s “failure to adduce empirical data that 

can readily be obtained” can sometimes require setting 

aside an agency’s decision under the Administrative 

Procedure Act. FCC v. Fox Television Stations, Inc., 556 

U.S. 502, 519 (2009) (citing Motor Vehicles Mfrs. Ass’n of 

the U.S., Inc. v. State Farm Mutual Auto. Ins. Co., 433 

U.S. 29, 46–56 (1983)).

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26 CS WIND VIETNAM CO., LTD. v. US

regarding the overhead issue for Commerce to proceed in 

accordance with this opinion.

No costs.

REVERSED IN PART, AFFIRMED IN PART, AND 

VACATED AND REMANDED IN PART

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