1 The Sioux Honey Association and the American Honey

Producers Association were granted leave to intervene as of right

in this action. See Order of 1/4/05. 

Slip Op. 06–137

UNITED STATES COURT OF INTERNATIONAL TRADE

______________________________

:

JINFU TRADING CO., LTD., :

:

Plaintiff, : Before: Richard K. Eaton, Judge

:

:

v. :

: Court No. 04-00597

: Public Version

UNITED STATES, : 

:

Defendant. :

______________________________:

OPINION AND ORDER

[United States Department of Commerce’s final results rescinding

plaintiff’s new shipper review remanded]

Dated: September 7, 2006

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP

(Bruce M. Mitchell and Adam M. Dambrov), for plaintiff.

Peter D. Keisler, Assistant Attorney General; David M.

Cohen, Director, Commercial Litigation Branch, Civil Division,

United States Department of Justice; Jeanne E. Davidson, Deputy

Director, International Trade Section, Commercial Litigation

Branch, Civil Division, United States Department of Justice

(David S. Silverbrand), for defendant.

Eaton, Judge: This matter1 is before the court on plaintiff

Jinfu Trading Co., Ltd.’s (“plaintiff” or “Jinfu PRC”) Rule 56.2

motion for judgment upon the agency record challenging the
Court No. 04-00597 Page 2

2 While plaintiff’s motion and the Final Results address

the affiliation between Jinfu PRC and Jinfu USA, the record does

not contain any evidence that a company named Jinfu USA existed

as of November 2, 2002, the date of the claimed new shipper sale. 

What the record does indicate, however, is that Yousheng USA, the

predecessor to Jinfu USA, did exist on November 2, 2002, and

indeed was the entity involved in the subject sale. Therefore,

the court’s review will refer to the alleged affiliated company,

where appropriate, as Yousheng USA.

3 The statute provides, in pertinent part, that the

following persons are deemed “affiliated”: “(F) Two or more

persons directly or indirectly controlling, controlled by, or

under common control with, any person”; “(G) Any person who

controls any other person and such other person.” 19 U.S.C. §

1677(33).

findings in the United States Department of Commerce’s

(“Commerce” or “the Department”) final results and final

rescission of plaintiff’s new shipper review (“NSR”) for entries

of honey from the People’s Republic of China (“PRC” or “China”). 

See Honey From the PRC, 69 Fed. Reg. 64,029 (ITA Nov. 3, 2004)

(final results) (“Final Results”). By its motion, plaintiff

contests the Department’s conclusion that neither Yousheng

Trading (U.S.A.) Co., Ltd. (“Yousheng USA”)2 nor its successor

Jinfu Trading (U.S.A.) Co., Ltd. (“Jinfu USA”) were affiliated

with Jinfu PRC within the meaning of 19 U.S.C. § 1677(33)(F) or

(G) (2000) on November 2, 2002, the date of the sale claimed as

the basis for the NSR.3 Commerce insists that because the record

does not support the conclusion that on November 2, 2002,

plaintiff’s CEO owned or controlled either Yousheng USA or Jinfu

USA, Jinfu PRC’s sale of honey to Yousheng USA constituted the
Court No. 04-00597 Page 3

4 On November 8, 2002, Yousheng USA filed an amendment

with the State of Washington to change its name to Jinfu Trading

(U.S.A.) Co., Ltd. See Def.’s Opp’n at 4. 

5 For purposes of confidentiality, [[ ]], 

the resident officer of Jinfu USA, the successor to Yousheng USA,

will be referred to as “Mr. A”. It is unclear who actually owned

Yousheng USA when it was formed, Mr. A or [[ ]],

who will be referred to as “Mr. D”. Mr. A incorporated Yousheng

USA, but Mr. D was listed as the sole shareholder on the

instrument purporting to transfer ownership of the company. See

Pl.’s Conf. App. 10; see also Pl.’s Br. 10. 

first sale of the merchandise to an unaffiliated U.S. customer. 

As a result, Commerce found that the information contained in

plaintiff’s request for a new shipper review was incomplete. See

Final Results, 69 Fed. Reg. at 64,029–30. Thus, Commerce

maintains that it was justified in rescinding the new shipper

proceedings. Jurisdiction lies with 28 U.S.C. § 1581(c) (2000)

and 19 U.S.C. § 1516a(a)(2)(B)(iii). For the following reasons,

the Department’s Final Results are remanded. 

BACKGROUND

Plaintiff is an exporter of honey from the PRC. See Br.

Supp. Pl.’s R. 56.2 Mot. J. Ag. R. (“Pl.’s Br.”) at 7; see also

Def.’s Opp’n Pl.’s Mot. J. Ag. R. (“Def.’s Opp’n”) at 3. Its

alleged affiliate, Yousheng USA (whose name was later changed to

Jinfu Trading (U.S.A.) Co., Ltd.)4 is a domestic corporation,

formed by Mr. A5 in October of 2002 to import baby strollers from

the PRC. See Def.’s Opp’n at 4. Because the standards imposed
Court No. 04-00597 Page 4

6 For purposes of confidentiality, [[ ]],

the chairman and CEO of Jinfu PRC, will be referred to as “CEO

B”. Neither party disputes that as chairman and CEO, CEO B

controlled Jinfu PRC. 

7 Pursuant to the statute:

If the administering authority receives a

request from an exporter or producer of the

subject merchandise establishing that——

(I) such exporter or producer did

not export the merchandise that was

the subject of an antidumping duty

. . . order to the United States 

. . . during the period of

investigation, and

(continued...)

on entries of baby strollers made their importation difficult,

the plan was abandoned. See Pl.’s Br. at 9. As a result, Mr. A

was left to find another use for the company. Coincidentally,

Jinfu PRC’s chairman and CEO, CEO B,6 was seeking to establish a

U.S. company to import honey from the PRC. See id. at 10. 

Having learned of CEO B’s intentions, Mr. A suggested that CEO B

use Yousheng USA to import his merchandise. See id. Thereafter,

certain activities took place with the apparent purpose of: (1)

transferring ownership of Yousheng USA to CEO B; and (2) changing

the corporate name of Yousheng USA to Jinfu Trading (U.S.A.) Co.,

Ltd. (“Jinfu USA”). See Pl.’s Conf. App. 10. 

On June 30, 2003, in accordance with 19 U.S.C. §

1675(a)(2)(B),7 plaintiff filed a request with Commerce that it
Court No. 04-00597 Page 5

7(...continued)

(II) such exporter or producer is

not affiliated (within the meaning

of section 1677(33) of this title)

with any exporter or producer who

exported the merchandise to the

United States . . . during that

period,

the administering authority shall conduct a

review under this subsection to establish an

individual weighted average dumping margin 

. . . .

19 U.S.C. § 1675(a)(2)(B). 

8 This Court has described a “new shipper review” as a

proceeding where “Commerce is essentially conducting a new

antidumping review that is specific to a particular producer [or

exporter].” Tianjin Tiancheng Pharm. Co., Ltd. v. United States,

29 CIT __, __, 366 F. Supp. 2d 1246, 1249 (2005).

9 The regulation states, in pertinent part, that a

request for a new shipper review must contain the following: 

 (ii)(A) The certification [that the person requesting

the review did not export subject merchandise

to the United States during the period of

investigation]; and

(B) A certification from the person that

produced or supplied the subject

merchandise to the person requesting the

review that that producer or supplier

did not export the subject merchandise

to the United States . . . during the

period of investigation; 

(continued...)

initiate an NSR for the period beginning on December 1, 2002 and

ending May 31, 2003.8 See Pl.’s Br. at 7. As part of the

request, plaintiff made the certifications and supplied the

documentation required by 19 C.F.R. § 351.214(b) (2005).9 See
Court No. 04-00597 Page 6

9(...continued)

(iii)(A) A certification that, since the investigation

was initiated, such exporter or producer has

never been affiliated with any exporter or

producer who exported the subject merchandise

to the United States . . . during the period

of investigation, including those not

individually examined during the

investigation;

(B) In an antidumping proceeding involving

imports from a nonmarket economy

country, a certification that the export

activities of such exporter or producer

are not controlled by the central

government;

(iv) Documentation establishing:

(A) The date on which subject merchandise of

the exporter or producer making the

request was first entered, or withdrawn

from warehouse, for consumption, or, if

the exporter or producer cannot

establish the date of first entry, the

date on which the exporter or producer

first shipped the subject merchandise

for export to the United States;

(B) The volume of that and subsequent

shipments; and

(C) The date of the first sale to an

unaffiliated customer in the United

States . . . .

19 C.F.R. § 351.214(b)(2)(ii)-(iv). 

10 Although Yousheng USA did not file the necessary

documents to have its name changed to “Jinfu USA” until November

(continued...)

Pl.’s Br. at 7. Among other things, plaintiff certified that on

November 2, 2002, it sold honey to what it stated was its

American affiliate, Jinfu USA.10 Plaintiff further provided
Court No. 04-00597 Page 7

10(...continued)

8, 2002, “Jinfu USA” was listed on the invoice as the purchaser

of the honey from Jinfu PRC. See Pl.’s Conf. App. 1, Ex. 3.

11 For purposes of confidentiality, [[ ]],

the “unaffiliated U.S. customer,” will be referred to as

“Customer C.” 

instruments documenting that on December 17, 2002, its affiliate

resold the honey purchased from Jinfu PRC to an unaffiliated U.S.

customer, Customer C.11 See Pl.’s Conf. App. 1 at Ex. 3. Jinfu

PRC claimed that this sale constituted “[t]he date of the first

sale to an unaffiliated customer in the United States.” 19

C.F.R. § 351.214(b)(iv)(C); see also Pl.’s Conf. App. 1 at 3

(“Exhibit 3 . . . contains a copy of the commercial invoice for

the first sale to an unaffiliated customer in the United States,

which shows the date of this first sale to an unaffiliated

customer.”) (emphasis omitted). Based on plaintiff’s

certifications, the Department granted plaintiff’s request and

initiated the NSR for the period beginning on December 1, 2002

and ending May 31, 2003. See Honey From the PRC, 68 Fed. Reg.

47,537 (ITA Aug. 11, 2003). 

Commerce then issued its antidumping questionnaire, to which

plaintiff responded on September 16, 2003. See Pl.’s Br. at 8;

see also Pl.’s Conf. App. 4. In its response, plaintiff stated

that a company called Jinfu USA was its affiliate because CEO B

owned that company. See Pl.’s Br. at 8. Plaintiff’s response
Court No. 04-00597 Page 8

12 Plaintiff submitted several corporate documents to

support the affiliation claim articulated in its supplemental

response. First, plaintiff relied on the November 12, 2002

“Certificate of Existence/Authorization” as support for its claim

(continued...)

further included an invoice as evidence that November 2, 2002 was

the date of the first sale between Jinfu PRC and Jinfu USA. See

Def.’s Opp’n at 4. However, the response also contained evidence

indicating that ownership of Yousheng USA, the predecessor of

Jinfu USA, did not pass to CEO B until October 25, 2003, nearly

one year after the date of the claimed affiliated sale. See id.

This discrepancy between the date of the claimed affiliated

sale of the honey and the transfer of company ownership caused

the Department to conclude that more information relating to the

issue of affiliation was needed; thus, it issued a supplemental

questionnaire. See Pl.’s Br. at 9; see also Def.’s Opp’n at 4. 

In its supplemental response, plaintiff stated that: (1) Jinfu

USA was legally incorporated in the State of Washington on

October 4, 2002; (2) that Yousheng USA’s name was lawfully

changed to Jinfu USA on November 12, 2002; (3) that the October

25, 2003 execution date contained on the certificate purporting

to transfer 10,000 shares of Yousheng USA to CEO B was a clerical

error and the date should have been October 25, 2002; and (4)

that ownership of Yousheng USA passed to CEO B by the transfer of

10,000 shares of Yousheng USA stock. See Def.’s Opp’n at 4.12
Court No. 04-00597 Page 9

12(...continued)

that Jinfu USA existed as of October 4, 2002. Next, plaintiff

pointed to the “Certificate of Transfer of Shares” that purported

to transfer 10,000 shares of either Yousheng USA or Jinfu USA to

CEO B on October 25, 2002. Then, plaintiff referenced Jinfu

USA’s November 18, 2002 “Master Application” for a business

license, which it claimed demonstrated that the two companies

were affiliated. Plaintiff further contended that the March 24,

2003 “Amended Articles of Incorporation” for Jinfu USA

specifically stated that CEO B was the sole owner of Jinfu USA. 

Finally, plaintiff argued that Jinfu USA’s 2002 tax return, dated

June 13, 2003, indicated that Jinfu USA was wholly owned by CEO

B. See generally Pl.’s Conf. App. 10, 11. 

The Department then carried out verification of Jinfu PRC’s

questionnaire responses at both its China and U.S. facilities. 

See Pl.’s Br. at 12. At the China site, Commerce interviewed

Jinfu PRC officials and reviewed corporate documents, while in

the United States, the Department spoke with Mr. A about the

relationship between Yousheng USA and Jinfu PRC. See Pl.’s Br.

at 12–13; see also Def.’s Opp’n at 5. 

Upon reviewing the data contained in plaintiff’s

questionnaire responses, Commerce published its preliminary

results rescinding Jinfu PRC’s NSR. See Honey From the PRC, 69

Fed. Reg. 31,348, 31,349 (preliminary results) (ITA June 3, 2004)

(“Preliminary Results”). In the Preliminary Results, Commerce

found that Jinfu USA was not affiliated with Jinfu PRC on

November 2, 2002. As a result, Commerce deemed plaintiff’s

request for an NSR incomplete because it did not properly

describe the first unaffiliated sale of the merchandise. This
Court No. 04-00597 Page 10

13 In addition to its substantive challenges, plaintiff

seeks a remand of the Final Results because, in its view,

Commerce failed to afford it an adequate opportunity to explain

the inconsistencies that provided the basis for the Preliminary

Results. See Pl.’s Br. at 31–38. Because of the court’s remand

instructions, it is unnecessary to now decide plaintiff’s

ancillary claim.

conclusion was based primarily on the Department’s finding that

no company named Jinfu USA existed until November 12, 2002,

thereby rendering impossible any claim that plaintiff was

affiliated with that company on November 2, 2002. See Def.’s

Opp’n at 6. In addition, Commerce found that the October 25,

2003 date on the Certificate of Transfer of Shares precluded a

finding that CEO B owned either Yousheng USA or Jinfu USA on

November 2, 2002. See id. The reasons behind Commerce’s

conclusions were expanded upon in a memorandum that was released

to Jinfu PRC approximately one week prior to the publication of

the Preliminary Results. See generally Honey From the PRC:

Analysis of the Relationship and Treatment of Sale between Jinfu

Trading Co., Ltd., and Jinfu Trading (USA), Inc. (ITA May 26,

2004).

Following the publication of the Preliminary Results,

Commerce notified plaintiff that it would accept comments

regarding its findings.13 See Def.’s Opp’n at 7. Jinfu PRC took

advantage of this opportunity by submitting a case brief

claiming: (1) that Jinfu USA was an existing corporate entity in
Court No. 04-00597 Page 11

the State of Washington on November 2, 2002; and (2) that the

date of the Certificate of Transfer of Shares was a clerical

error and that the actual date ownership of Yousheng USA

transferred to CEO B was October 25, 2002. See Pl.’s Case Brief

in Honey from the PRC: NSR for 12/10/02–5/31/03-(Inv. No. A-570-

863) (July 7, 2004) at 6. Ultimately, Commerce affirmed in the

Final Results its preliminary finding that the two companies were

not affiliated and, thus, rescinded plaintiff’s NSR. See Final

Results, 69 Fed. Reg. at 64,029–30. Plaintiff challenges the

Final Results.

STANDARD OF REVIEW

When reviewing a final new shipper review determination by

Commerce, 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(b)(1)(B)(I); see also Hebei New

Donghua Amino Acid Co., Ltd. v. United States, 29 CIT __, __, 374

F. Supp. 2d 1333, 1337 (2005). “Substantial evidence is ‘such

relevant evidence as a reasonable mind might accept as adequate

to support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v.

United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting

Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The

existence of substantial evidence is determined “by considering
Court No. 04-00597 Page 12

the record as a whole, including evidence that supports as well

as evidence that ‘fairly detracts from the substantiality of the

evidence.’” Id. (quoting Atl. Sugar, Ltd. v. United States, 744

F.2d 1556, 1562 (Fed. Cir. 1984)). In addition, “‘a reviewing

court is not barred from setting aside a[n] [agency] decision

when it cannot conscientiously find that the evidence supporting

that decision is substantial, when viewed in the light that the

record in its entirety furnishes, including the body of evidence

opposed to the [agency’s] view.’” Nippon Steel Corp. v. United

States, __ F.3d __, __ (Fed. Cir. 2006) (internal quotation marks

and citation omitted); see also id. (“It will be the duty of the

courts to determine in the final analysis and in the exercise of

their independent judgment, whether on the whole record the

evidence in a given instance is sufficiently substantial to

support a finding, conclusion, or other agency action as a matter

of law.”). Finally, the possibility of drawing two opposite, yet

equally justified conclusions from the record will not prevent

the agency’s determination from being supported by substantial

evidence. Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).

DISCUSSION

 I. Affiliation Between Jinfu PRC and Yousheng USA

A. Relevant Law

In its affiliation analysis, Commerce must examine the
Court No. 04-00597 Page 13

14 According to the statute:

The following persons shall be considered

“affiliated” or “affiliated persons”:

(A) Members of a family, including

brothers and sisters (whether by

the whole or half blood), spouse,

ancestors, and lineal descendants.

(B) Any officer or director of an

organization and such organization.

(C) Partners.

(D) Employer and employee.

(E) Any person directly or

indirectly owning, controlling, or

holding with power to vote, 5

percent or more of the outstanding

voting stock or shares of any such

organization and such organization.

(F) Two or more persons directly or

indirectly controlling, controlled

by, or under common control with,

any person.

(G) Any person who controls any

other person and such other person.

For purposes of this paragraph, a person

shall be considered to control another person

if the person is legally or operationally in

a position to exercise restraint or direction

over the other person.

19 U.S.C. § 1677(33).

subject relationship in accordance with 19 U.S.C. § 1677(33).14

This section contains two subsections that provide general

descriptions of affiliated persons. See 19 U.S.C. §§

1677(33)(F), (G). The first general provision, § 1677(33)(F),
Court No. 04-00597 Page 14

states that “[t]wo or more persons directly or indirectly

controlling, controlled by, or under common control with, any

person,” are affiliated. 19 U.S.C. § 1677(33)(F). Similarly, §

1677(33)(G) instructs that affiliation is had between “[a]ny

person who controls any other person and such other person.” 19

U.S.C. § 1677(33)(G). At the conclusion of § 1677(33), Congress

inserted an additional paragraph stating even more particularly

that, “[f]or purposes of [§ 1677(33)], a person shall be

considered to control another person if the person is legally or

operationally in a position to exercise restraint or direction

over the other person.” 19 U.S.C. § 1677(33). Thus, these

provisions of the statute direct Commerce to center its

affiliation analysis on the question of control, i.e., whether

one party is in a position to “exercise restraint or direction”

over another. 

Commerce is also guided by the regulations to § 1677(33),

which provide: 

In determining whether control over another person

exists, within the meaning of [19 U.S.C. § 1677(33)],

the Secretary will consider the following factors,

among others: corporate or family groupings; franchise

or joint venture agreements; debt financing; and close

supplier relationships. The Secretary will not find

that control exists on the basis of these factors

unless the relationship has the potential to impact

decisions concerning the production, pricing, or cost

of the subject merchandise or foreign like product. 

The Secretary will consider the temporal aspect of a

relationship in determining whether control exists;
Court No. 04-00597 Page 15

normally, temporary circumstances will not suffice as

evidence of control.

19 C.F.R. § 351.102(b). 

This Court has interpreted the statutory and regulatory

language as requiring Commerce to find affiliation where the

party alleging affiliation has demonstrated that “[t]wo or more

entities . . . share various control relationships whereby one

entity is legally or operationally in a position to exercise

restraint or direction over the other and that such relationship

provides one entity the significant potential for the

manipulation of price or production of the other.” Hontex

Enters., Inc. v. United States, 29 CIT __, __, 387 F. Supp. 2d

1353, 1358 (2005) (internal quotation marks omitted). In

addition, this Court has further held that a finding of control

does not require a showing of actual control, but rather proof

that one party has the potential to exercise control over the

other is sufficient. See China Steel Corp. v. United States, 28

CIT __, __, 306 F. Supp. 2d 1291, 1299 (2004) (“‘The

[affiliation] statute focuses on the capacity to control, rather

than on the actual exercise of control.’”) (quoting Ta Chen

Stainless Steel Pipe, Ltd. v. United States, 23 CIT 804, 813

(1999) (not reported in the Federal Supplement)).
Court No. 04-00597 Page 16

Therefore, the court must determine whether Commerce

reasonably concluded that the evidence failed to demonstrate that

on November 2, 2002, CEO B had, at a minimum, the potential to

exercise control over the pricing decisions of Yousheng USA.

B. Evidence of Affiliation: Ownership Interest

Jinfu PRC initially claims that because CEO B was the owner

of Jinfu USA, the entities were affiliated on November 2, 2002. 

Plaintiff raises several arguments to demonstrate that Commerce

failed to consider the “compelling” record evidence supporting

this claim. See Pl.’s Br. at 20. Its arguments relate

principally to the Department’s conclusion that plaintiff’s

proffered evidence failed to support its assertions that Jinfu

USA existed on November 2, 2002, and that CEO B owned or

controlled the company on that date. See id. 

Plaintiff’s primary contention in response to Commerce’s

determination that Jinfu USA did not exist on November 2, 2002,

is that Commerce erred by not giving due credit to the

Certificate of Existence/Authorization (“Certificate of

Existence”) issued to Jinfu USA by the State of Washington. See

id. at 20–21. As plaintiff states, “on November 12, 2002, the

State of Washington issued a [Certificate of Existence] to a

company named ‘Jinfu Trading (USA) Inc.’ expressly stating that
Court No. 04-00597 Page 17

the original ‘Certificate of Incorporation’ was issued to this

company by the State of Washington on October 4, 2002.” Id. 

Plaintiff understands this document to indicate that, as of

October 4, 2002, Jinfu USA existed as a corporate entity. See

id. Thus, plaintiff argues that had Commerce accorded an

appropriate level of credit to this document, it would have been

compelled to conclude that Jinfu USA existed at the time of the

first sale.

Plaintiff next contends that the Department erred in finding

that CEO B did not have any ownership interest in either Yousheng

USA or Jinfu USA at the time of the claimed new shipper sale

because the Certificate of Transfer of Shares was dated October

25, 2003, almost one year after the date of the new shipper sale. 

See Pl.’s Br. at 23. Plaintiff bases it argument on its

understanding of the law of contracts, which it contends does not

require an agreement to be either reduced to writing or signed in

order to become effective. See id. (“The contract needn’t be in

writing; if it is in writing, it needn’t be signed, provided

there’s other evidence of acceptance, for example . . . by

performance.”) (internal citation and quotation marks omitted). 

In addition to relying on general contract principles, plaintiff

analogizes its situation to that presented in Washington State

securities law, which plaintiff states “expressly provides that a
Court No. 04-00597 Page 18

signed, written contract is not required to enforce an agreement

to sell securities.” Id. at 24 (citing Wash. Rev. Code § 62A.8-

113). In other words, plaintiff claims that regardless of the

date on the Certificate of Transfer of Shares, actual ownership

of Yousheng USA transferred to CEO B on October 25, 2002. 

As additional support for its claim that CEO B owned Jinfu

USA on November 2, 2002, plaintiff points to several corporate

documents including the November 18, 2002 Master Application for

Jinfu USA’s business license, Jinfu USA’s March 24, 2003 Amended

Articles of Incorporation, and Jinfu USA’s 2002 tax return, dated

June 13, 2003. See generally id. at 20. According to plaintiff,

although these documents are dated after the date of the claimed

new shipper sale, each one indicates that CEO B was the sole

owner of Jinfu USA on November 2, 2002. See, e.g., id. at 21

(“[b]oth the original and amended tax returns expressly stated

that [CEO B] was the 100 percent owner of Jinfu-USA.”). 

Next, plaintiff argues that Commerce failed to consider the

data gathered at verification from CEO B and Mr. A. In

plaintiff’s view, the information adduced through Commerce’s

interviews of both CEO B and Mr. A established that the formation

date of Jinfu USA was October 4, 2002, and that CEO B owned that

company on the date of the claimed new shipper sale. Id. Put
Court No. 04-00597 Page 19

another way, plaintiff contends that the data marshaled through

verification were not only credible, but also failed to provide

the Department with “any evidence, let alone substantial

evidence, that Jinfu-USA was owned by any person other than [CEO

B].” Id. 

Commerce takes issue with plaintiff’s argument that the

State of Washington documents remove all doubt as to when Jinfu

USA existed as a corporate entity. See Def.’s Opp’n at 17. The

Department further asserts that plaintiff’s proffered documents

fail to establish that CEO B owned either Yousheng USA or Jinfu

USA, and, thus, do not support a finding that Jinfu PRC and the

U.S. company were affiliated as of November 2, 2002. See id. 

According to Commerce:

[T]he documents upon which [plaintiff] relies are all

dated after November 2, 2002, the date of the subject

sale and, therefore, do not demonstrate control on

November 2. 

Additionally, in the “Master Application” filed with

the state of Washington on November 18, 2002, sixteen

days after the new shipper sale, which lists all

owners, neither Jinfu PRC nor its CEO are purported to

be owners, but rather the only name present is an

employee of Jinfu USA’s predecessor company, Yousheng

USA. Furthermore, although the “Master Application”

requested notification of any change of ownership, no

change was indicated upon the record. Further still,

the portion of the form stating whether Jinfu USA, “is

owned by, controlled by, or affiliated with any other

business entity,” is blank. 

Id. 
Court No. 04-00597 Page 20

Moreover, the Department states that:

[R]ecord evidence from the State of Washington and the

“Amended Articles of Incorporation” prepared by

Yousheng USA’s/Jinfu USA’s U.S. attorney, contradict

the information submitted and statements by Jinfu PRC

concerning the date on which the transfer of ownership

took place. First, none of the documents filed with

the State of Washington state that the CEO of Jinfu PRC

is the owner of Yousheng USA or Jinfu USA or that

either Yousheng USA or Jinfu USA changed ownership. 

. . . [T]he record lacks evidence demonstrating that

Jinfu USA informed the State of Washington of any

alleged change in ownership as late as November 8,

2002. Furthermore, Jinfu USA’s “Amended Articles of

Incorporation” were signed well after January 2003,

further calling into question the alleged date of

transfer of ownership, and it is unclear from the

record whether this document was in fact filed by Jinfu

USA with the State of Washington. Lastly, Jinfu USA’s

application for a “Master Business License,” examined

by the Department at its Jinfu CEP Verification,

contradicts Jinfu PRC’s assertion that its CEO owned

Jinfu USA on October 25, 2002. . . .

Issues and Decision Memorandum for the Final Results and Final

Rescission, In Part, of the New Shipper Review of the Antidumping

Duty Order on Honey from the PRC (ITA Oct. 25, 2004) (“Issues &

Decision Mem.”) at 11. In other words, Commerce maintains that

plaintiff’s evidence that a company named Jinfu USA existed on

November 2, 2002 and that CEO B owned that company, is not

probative of the facts plaintiff wishes to establish. 

Commerce further observes that the Certificate of Transfer

of Shares, which memorialized the transfer of ownership of

Yousheng USA to CEO B, did not become legally effective until

signed. See id. at 10. Although bearing the date October 25,
Court No. 04-00597 Page 21

2003, Commerce notes that the document was not signed until

December 30, 2003, more than one year after the date of the

claimed new shipper sale. In an effort to explain this

discrepancy, plaintiff submitted the affidavit of CEO B, in which

he claimed that in December 2003, he recognized that he had not

signed the transfer, and so he signed it and backdated it October

25, 2003. See Def.’s Opp’n at 18. For Commerce, the admission

by CEO B that he backdated the document renders unreliable

plaintiff’s claim that it was not dated October 25, 2002 because

of a clerical error. 

Commerce finds additional fault with the Certificate of

Transfer of Shares, which purported to transfer complete

ownership of Yousheng USA to Jinfu PRC through the transfer of

10,000 shares of stock. According to Commerce, the March 24,

2003 Amended Articles of Incorporation for Jinfu USA, however,

state that there were 500,000 shares of the company outstanding

as of that date. See Def.’s Opp’n at 18. Thus, the Department

asserts that a controlling interest in the company could not have

been achieved by the transfer of only 10,000 shares of stock. 

See id. at 17; see also Issues & Decision Mem. at 24 (“[T]he

amount of shares allegedly transferred to the CEO of Jinfu PRC on

October 25, 2002 is different from the amount of shares listed in

Jinfu USA’s ‘Amended Articles of Incorporation’ dated March 24,
Court No. 04-00597 Page 22

15 Mr. D, the general manager of 

[[ ]], assumed the [[ ]] fee 

Mr. A incurred as a result of incorporating Yousheng USA. See

Pl.’s Br. at 9, 13; see also Pl.’s Conf. App. 7, 10. 

2003.”).

It is apparent that Commerce was not unreasonable in

concluding that a company named Jinfu USA did not exist on

November 2, 2002, and that CEO B did not own Jinfu USA or its

predecessor Yousheng USA on that date. First, while Mr. A

formally applied to change Yousheng USA’s name to Jinfu Trading

(U.S.A.) Co., Ltd., he did not do so until November 8, 2002. 

Second, the November 12, 2002 Certificate of Existence, the

document that recognized Yousheng USA’s name change, indicates

that Mr. A incorporated Yousheng USA, not Jinfu USA, on October

4, 2002. As of that date, the company was owned by either Mr. A

or Mr. D,15 not CEO B. Third, all of the evidence relied upon

by plaintiff to show ownership by CEO B is both equivocal and

dated after November 2, 2002. That is, the Certificate of

Existence indicating that Yousheng USA had been renamed Jinfu USA

is dated November 12, 2002; the Master Application for Jinfu

USA’s business license is dated November 18, 2002; the

Certificate of Transfer of Shares was signed on December 30,

2003, but backdated to October 25, 2003; the Amended Articles of

Incorporation are dated March 24, 2003; and Jinfu USA’s 2002 tax
Court No. 04-00597 Page 23

16 According to the verification report, CEO B paid the 

[[ ]] debt incurred by [Mr. A] on [[ ]]

(continued...)

return is dated June 13, 2003. Thus, the court cannot agree with

plaintiff that these documents, all dated after November 2, 2002,

support its claim that CEO B owned either Yousheng USA or Jinfu

USA on that date. 

Further, the court finds unavailing plaintiff’s argument

that the Certificate of Transfer of Shares did not require the

parties’ signatures in order to become effective. By its terms,

the document provides that: “THIS CERTIFICATE TRANSFER IS

EFFECTIVE UPON EXECUTION BY THE UNDERSIGNED.” Pl.’s Conf. App.

7. It is clear, therefore, that the Certificate of Transfer of

Shares was not to gain legal effect unless and until the parties

signed it. Even if this document were found to be effective as

of October 25, 2003, an unlikely conclusion given that it was

actually signed and backdated by CEO B on December 30, 2003, it

would still have been effective eleven months after November 2,

2002. Further undermining plaintiff’s argument that the law of

contracts gives effect to the Certificate of Transfer of Shares

on October 25, 2002 although neither party had signed the

document as of that date, is CEO B’s failure to pay Mr. D the

consideration for the shares until more than one year after the

date of the claimed new shipper sale.16 In other words, because
Court No. 04-00597 Page 24

16(...continued)

as part of the consideration for the transfer. See Pl.’s Br. at

13.

the transfer was not supported by valid consideration until well

after November 2, 2002, plaintiff cannot rely on an unwritten

contract as support for its claim of ownership. 

It is likewise apparent that the substance of plaintiff’s

other evidence is equally lacking with respect to CEO B’s claim

of ownership in Jinfu USA. For instance, the portion of the

Master Application in which it was asked if Yousheng USA was

owned, controlled, or affiliated with another entity was left

blank, thereby providing evidence that as late as November 12,

2002, Yousheng USA was still owned by Mr. D. See Pl.’s Conf.

App. 10, Ex. 1 at 3(h) (“If this business is owned by, controlled

by, or affiliated with any other business entity, please indicate

that business entity’s name . . . [no company reported] . . .

.”). Finally, the court finds plaintiff’s assertion regarding

Jinfu USA’s 2002 tax return to be without merit. The tax return

was dated June 13, 2003. In addition, the tax return is not

signed and it is not clear that it was ever filed. Therefore,

while the tax return stated that Jinfu USA was wholly owned by

CEO B, it was reasonable for Commerce to conclude that the 2003

document was not alone sufficient to establish ownership on

November 2, 2002. 
Court No. 04-00597 Page 25

17 The Uruguay Round Agreements Act of 1994 modified the

then existing law to include, among other things, subsection (G),

(continued...)

Based on the foregoing, the court finds that there is no

evidence that Jinfu USA was the name of a corporate entity on

November 2, 2002. Likewise, nothing indicates that any ownership

interest in either Yousheng USA or Jinfu USA was transferred to

CEO B on or before November 2, 2002. While CEO B may have made

some effort to obtain ownership of Yousheng USA and then change

its name to Jinfu USA, the record does not reflect that he was

successful in doing so by November 2, 2002. Thus, the court

cannot find as unsupported by substantial evidence Commerce’s

determination that CEO B did not have sole ownership of either

Yousheng USA or Jinfu USA as of the claimed new shipper sale.

C. Evidence of Affiliation: Control

A conclusion with respect to ownership does not end the

court’s inquiry as a finding of affiliation does not rest on

ownership. In this regard, plaintiff further asserts that the

Department unreasonably concluded that CEO B was not in a

position to exercise control over either Yousheng USA or Jinfu

USA within the meaning of 19 U.S.C. §§ 1677(33)(F) or (G) on

November 2, 2002. See Pl.’s Br. at 27. According to plaintiff,

Commerce disregarded the changes to affiliation law imposed by

the Uruguay Round Agreements Act of 199417 with respect to the
Court No. 04-00597 Page 26

17(...continued)

which added the notion of control to the statute. See H.R. Doc.

No. 103-465 at 838, reprinted in 1994 U.S.C.C.A.N. (108 Stat.)

4041, 4174. As the Statement of Administrative Action states,

“[t]he Administration believe[d] that including control in the

definition of ‘affiliated’ [would] permit a more sophisticated

analysis which better reflects the realities of the marketplace.” 

Id.

importance of control to the agency’s analysis, as well as this

Court’s interpretation of those changes. See id. at 28.

Plaintiff first disputes the Department’s finding that the

record was devoid of evidence demonstrating CEO B’s potential to

influence Jinfu USA’s sales or pricing decisions. See Issues &

Decision Mem. at 26. In particular, plaintiff directs the

court’s attention to the interview with Mr. A, who became

Yousheng USA’s resident officer. For plaintiff,

[Commerce’s] U.S. Sales Verification Report of May 5,

2004, . . . summarized [the] interview of [Mr. A],

which unequivocally confirmed that [CEO B] controlled

Jinfu-USA. The [Department’s] conclusion also is

contradicted by the communications between [Mr. A] and

[CEO B], which confirm that [CEO B] approved [Mr. A’s]

sales price to Jinfu-USA’s customer. Finally, [the

Department’s] conclusion ignores all of the evidence

presented by the parties regarding the transfer of

ownership of Jinfu-USA to [CEO B]. Thus, even if the

parties did not complete the legal niceties of

transferring ownership prior to the actual sales

transactions in issue, there can be no serious dispute

that [CEO B] attempted to acquire 100% ownership of

Jinfu-USA and that [CEO B] and [Mr. A’s] business

relationship was based on their mutual understanding

that [CEO B] owned Jinfu-USA. . . . 

Pl.’s Br. at 29. 
Court No. 04-00597 Page 27

Thus, plaintiff challenges the Department’s finding that

Jinfu PRC and Yousheng USA or its successor Jinfu USA “had an

ongoing, arm’s-length commercial relationship established for the

mutual benefit of each party.” Issues & Decision Mem. at 27; see

also Pl.’s Br. at 29–30. According to plaintiff, “the

communications between the parties verified by the [Department]

clearly establish that [Mr. A] advised [CEO B] of all material

aspects of his resale, including the name of the U.S. customer,

and that the resale by Jinfu-USA was not finalized until the

resale price had been approved by [CEO B].” Pl.’s Br. at 30. 

Thus, plaintiff argues that it did not deal with Yousheng USA or

its successor Jinfu USA at arm’s length, but rather enjoyed

substantial control over the company’s business decisions,

particularly those dealing with pricing. 

As previously noted, a finding of control requires proof

that one person is legally or operationally in a position to

exercise restraint or direction over the other person, and that

“the relationship with the third party must have the potential to

impact decisions concerning the production, pricing, or cost of

the subject merchandise.” TIJID, Inc. v. United States, 29 CIT

__, __, 366 F. Supp. 2d 1286, 1293 (2005); see also 19 U.S.C. §

1677(33). 
Court No. 04-00597 Page 28

18 With respect to the question of affiliation, it is

simply immaterial that as of November 2, 2002, Yousheng USA had

not yet been renamed Jinfu USA. Whatever the name at a

particular time, Yousheng USA and Jinfu USA were the same

corporation. 

Here, the court finds that the record contains definite and

uncontroverted evidence that CEO B not only had the potential to

influence what was then Yousheng USA’s pricing decisions, but, in

fact, exercised that control; and further that Mr. A believed his

resale prices were subject to CEO B’s approval. Indeed, the

record leaves little doubt that CEO B, while he may not have

owned the U.S. entity,18 certainly controlled that company’s

pricing decisions. In addition, Commerce fails to cite

substantial evidence that would support the opposite conclusion. 

Therefore, the court finds that Commerce unreasonably concluded

that the two entities were not affiliated. 

Support for this finding is found primarily in the

Department’s verification report. For instance, in the report,

Mr. A explains that for transactions where he resells honey

originally purchased from Jinfu PRC, he takes the following

steps:

(1) negotiate material terms of sale with U.S.

customer; (2) enter a non-binding sales contract with

the U.S. customer; (3) purchase merchandise from Jinfu

in the PRC; (4) inform [CEO B] by telephone of

finalized . . . material terms of sale and fax him a

copy of the sales contract; (5) receive bill of lading,

which includes on-board date of the merchandise; (6)
Court No. 04-00597 Page 29

receive shipping notification of estimated arrival

date; (7) prepare sales invoices for estimated arrival

date; and (8) issue invoice to the U.S. customer once

the merchandise has cleared FDA.

Pl.’s App. 13 at 7. For the sale in question, Mr. A stated that:

Subsequent to his negotiations with [Customer C], . . .

[Mr. A] faxed a letter to [CEO B] relaying the result

of his negotiations . . . and U.S. honey market

research. . . . In a reply fax, [CEO B] agreed that

the sale with [Customer C] was a good opportunity for

Jinfu USA and that the negotiated price was reasonable. 

As such, . . . [Mr. A] entered into a sales contract

with [Customer C] . . . . 

Id. at 6–7. 

As a result, the fax sent by Mr. A to CEO B on November 13,

2002, read as follows:

Firstly, I would like to report you that the current

market price of honey in the United States is between

[[ ]] and [[ ]] per pound. Because of the

sharp reduction of the export of honey from other

countries, the domestic sales and price of honey in the

United States is very promising. 

I contacted a US local client who was willing to order

a container of honey at the ex-warehouse price of [[ 

 ]] USD per ton on the condition that it can pass

the examination of US customs and FDA. Since the

annual purchasing amount of this client is relatively

significant, if a good relationship can be established

with this client, it will be of great help to our

company’s sales to the US.

Please let me know you[r] opinion and advise me

further.

Pl.’s App. 7. CEO B sent a reply fax on the same day stating

that:

We received you[r] letter and felt happy that there are

clients are [sic] interested in the honey product of
Court No. 04-00597 Page 30

19 The sale price between Jinfu PRC and Yousheng USA was

[[ ]] USD per ton. See Jinfu PRC’s Response to First

Supplemental Section A & C Questionnaire at 7.

our company. You did a good job on the report of the

US market. We finished a container . . . on November

5.

In order to open the US market and better understand

the marketing information, I agree with you. We accept

the client’s quotation of [[ ]] USD per ton19 as

ex-warehouse price on the condition that it passes the

examination of the US customs and FDA. Please make the

preparation and keep in touch with the client for

purpose of long term cooperation. I hereby authorize

you to sign contract with the client.

Id.

This evidence demonstrates that CEO B exercised control over

Yousheng USA’s resale price of the honey to Customer C. In his

reply to Mr. A, CEO B stated that “[w]e accept the client’s

quotation of [[ ]] USD per ton . . . .” Id. That is,

based on the quoted price, he authorized Mr. A to enter into the

transaction. See id. In addition, when speaking of the benefits

of the Customer C deal, Mr. A stated that “it will be of great

help to our company’s sales to the US.” Id. The reference to

“our” company can only be understood as a broad reference to

“Jinfu Trading,” which would encompass both Jinfu PRC and

Yousheng USA. Thus, the faxes indicate that Mr. A did not enter

into the transaction at the quoted price before getting the

approval of CEO B, and that he believed he was working for a
Court No. 04-00597 Page 31

20 In the verification report, the Department noted that

“[a]ccording to [Mr. A], within his culture sales contracts are

not considered to be binding, and therefore, can be broken at any

time.” Pl.’s Conf. App. 13 at 7 n.1. This does not, however,

alter the fact that Mr. A would not finalize a transaction with a

U.S. customer unless and until he had received CEO B’s approval.

single enterprise encompassing Jinfu PRC and Yousheng USA. 

The record also demonstrates that Mr. A believed that his

resale prices were subject to CEO B’s control and indeed acted in

accordance with that belief. In addition to the faxes, the

Department’s discussion with Mr. A reveals that, after

negotiating a deal with a U.S. customer, Mr. A would enter a nonbinding contract with that customer, and then notify CEO B of the

pending transaction.20 See id. Once the agreed-upon price was

approved by CEO B, Mr. A would finalize the U.S. transaction. 

This clearly shows that Mr. A believed he was subject to CEO B’s

control. Further, the record contains several references by Mr.

A to Jinfu PRC as his company’s “affiliate.” See, e.g., id. at 3

(“[Mr. A] stated that Jinfu USA’s parent company, and only

affiliate, is Jinfu in the PRC.”); see also id. at 9 (“[Mr. A]

stated that Jinfu USA only purchases honey from its affiliate,

Jinfu in the PRC.”). Thus, it is apparent that Mr. A understood

that his pricing decisions were subject to CEO B’s approval on

November 2, 2002. At no point does the Department demonstrate

that it considered the relevance of this evidence with respect to
Court No. 04-00597 Page 32

the potential for CEO B to control Yousheng USA’s resale price

and his actual control of the price in the November 2, 2002

transaction. Rather, Commerce rests its finding on evidence

relating to the ownership of the company. See, e.g., Issues &

Decision Mem. at 21 (“For purposes of these final results, we

continue to find that Jinfu PRC and Jinfu USA were not affiliated

based on our analysis of record evidence demonstrating that Jinfu

PRC did not own Jinfu USA at the time of the relevant U.S.

sale.”). Therefore, the court finds that Commerce has not

supported with substantial evidence its conclusion that Mr. A

acted independently from CEO B’s control, and that, in fact, the

cited record evidence demonstrates the opposite conclusion. See

19 C.F.R. § 351.102(b); see also Ta Chen Stainless Steel Pipe, 23

CIT at 809, 811 (finding control where, among other things, the

controlled company had been established by officers and managers

of the controlling company, and where the controlled company only

distributed the controlling company’s products). 

CONCLUSION

Therefore, in accordance with the foregoing, the court finds

that Commerce’s conclusions with respect to affiliation in the

Final Results are not supported by substantial evidence and,

thus, remands this case. On remand, Commerce is directed to

either find that Jinfu PRC and Yousheng USA were affiliated as of
Court No. 04-00597 Page 33

November 2, 2002, and to reinstate plaintiff’s new shipper

review, or to provide other record evidence to support its

conclusion that the companies were not affiliated. In the event

that the Department does not concur with the court’s finding, it

shall reopen the record to provide plaintiff with an opportunity

to place thereon further evidence with respect to affiliation and

to provide an explanation of that evidence. Remand results are

due December 6, 2006. Comments are due January 5, 2007. Replies

to such comments are due January 16, 2007.

 

 /s/Richard K. Eaton 

 Richard K. Eaton

Dated: September 7, 2006

New York, New York