1 That term is defined by subsection (A) of this section

1677(18) to mean

any foreign country that the [ITA] determines does not

operate on market principles of cost or pricing structures, so that sales of merchandise in such country do

not reflect the fair value of the merchandise.

 Slip Op. 04 - 31

 UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - -x

THE COALITION FOR THE PRESERVATION 

OF AMERICAN BRAKE DRUM AND ROTOR : 

AFTERMARKET MANUFACTURERS, 

 :

 Plaintiff, 

 : 

 v. Court No. 01-00825

 :

UNITED STATES, 

 :

 Defendant. 

- - - - - - - - - - - - - - - - - - -x

 Opinion & Order

[Plaintiff's motion for judgment on the 

 agency record granted; remanded to the 

 International Trade Administration.]

 Decided: April 1, 2004

Porter Wright Morris & Arthur LLP (Leslie Alan Glick) for 

the plaintiff.

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

Director, and Lucius B. Lau, Assistant Director, Commercial 

Litigation Branch, Civil Division, U.S. Department of Justice

(Stephen C. Tosini); and Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Augusto Guerra), of

counsel, for the defendant.

AQUILINO, Judge: This case is cause to consider, yet

again, the People's Republic of China ("PRC"), which the International Trade Administration, U.S. Department of Commerce ("ITA")

continues to deem a "nonmarket economy country" within the meaning

of the Omnibus Trade and Competitiveness Act of 1988, Pub. L. No.

100-418, §1316(b), 102 Stat. 1107, 1187, 19 U.S.C. §1677(18)1. The
Court No. 01-00825 Page 2

matter arises out of the ITA's Notice of Final Determinations of

Sales at Less Than Fair Value: Brake Drums and Brake Rotors From

the People's Republic of China, 62 Fed.Reg. 9,160 (Feb. 28, 1997),

in particular, the agency's subsequent determination reported sub

nom. Brake Rotors From the People's Republic of China: Final

Results and Partial Rescission of Fifth New Shipper Review, 66 Fed.

Reg. 44,331 (Aug. 23, 2001).

As these citations indicate, motor-vehicle brake parts

cast in China have been found to have been dumped in the U.S.

aftermarket encompassing automobiles, all-terrain and recreational

vehicles, trucks, and vans weighing less than a ton and a half.

The underlying determinations set China-wide rates of 86.02 percent

for the brake drums and 43.32 percent for the brake rotors. See 62

Fed.Reg at 9,174. Only the rotor rate, however, has remained of

moment, since the International Trade Commission thereafter determined that the U.S. industry was not being materially injured or

threatened with material injury by reason of the brake-drum imports. See Certain Brake Drums and Rotors From China, 62 Fed.Reg.

18,650 (April 16, 1997), aff'd sub nom. Coalition for the Preservation of American Brake Drum & Rotor Aftermarket Mfrs. v. United

States, 22 CIT 520, 15 F.Supp.2d 918 (1998). And that country-wide

rotor rate has led to applications by Chinese exporters for

individuated rates in lieu thereof.
Court No. 01-00825 Page 3

 

2 Plaintiff's Appendix, Pub.Doc. 3, Exhibit 4, fourth page.

 

3 Plaintiff's Appendix, Pub.Doc. 3, Exhibit 3, first page; 

Exhibit 4, second page. Attached to that exhibit 4 is an English translation of the Administrative Regulations of The P[RC]

Governing the Registration of Legal Corporations, article 1 of

which states that they have been promulgated, among other things,

"to safeguard social and economic order." Article 2 thereof

provides that an

enterprise which meets the requirements of a legal

person shall register as a corporation in accordance

with the provisions of these Regulations if it is:

(1) an enterprise owned by the whole people;

(2) a collectively-owned enterprise;

(3) an allied enterprise;

(4) a Sino-foreign joint equity enterprise,

Sino-foreign co-operative enterprise or

sole foreign investment enterprise established within the territory of the P[RC];

(5) a private enterprise; or

(6) another type of enterprise which is legally

required to register as a corporation.

I

Such an application underlies this case. It was made

pursuant to 19 U.S.C. §1675(a)(2)(B) and 19 C.F.R. §§ 351.214,

351.221 (2000) by Shandong Laizhou Huanri Group General Co.

("Huanri General") as an alleged "new shipper" of subject merchandise produced by Laizhou Huanri Automobile Parts Co., Ltd. ("HAP").

The application represented HAP to be a "limited liability

enterprise"2 and Huanri General as a "collectively owned enterprise"3 duly registered in China. The application certified that

the export activities of both enterprises "are not controlled by
Court No. 01-00825 Page 4

 

4 Plaintiff's Appendix, Pub.Doc. 3, Exhibit 1, first and

second pages.

 

5 Plaintiff's Appendix, Pub.Doc. 24, p. A-2. 

 

6 Id.

 

7 Id. at A-3.

the central government."4 Nonetheless, in its notice of review,

the ITA pointed out that

the Department's practice in cases involving non-market

economies [is] to require that a company seeking to

establish eligibility for an antidumping duty rate

separate from the country-wide rate provide de jure and

de facto evidence of an absence of government control

over the company's export activities. Accordingly, we

will issue a questionnaire to . . . Huanri . . .. If the

response . . . provides sufficient indication that it is

not subject to either de jure or de facto government

control with respect to its exports of brake rotors, each

review will proceed. If, on the other hand, a respondent

does not demonstrate its eligibility for a separate rate,

then it will be deemed to be affiliated with other

companies that exported during the POI, and the review of

that respondent will be rescinded.

Brake Rotors From the People's Republic of China: Initiation of

New Shipper Antidumping Duty Reviews, 65 Fed.Reg. 70,694, 70,695 

(Nov. 27, 2000). In response to the ITA's questionnaire, Huanri

General stated that it "has no relationship with any level of the

PRC government"5; that it established HAP, which also "has no

relationship with any level of the PRC government"6; and that it is

"not owned or controlled by a provincial or local government . . .

[and] has never been owned or controlled by any level of the PRC

government"7.
Court No. 01-00825 Page 5

The agency record at bar refers to a village of Panjacun,

town of Tushan, city of Laizhou, all within Shandong province,

which lies to the south and east of Beijing. A visit there by ITA

staff led to the "significant" finding that 

Huanri General is owned and controlled by the Panjacun

village committee which has a relationship with the

Tushan town government . . .. Accordingly, the Department must consider whether the company sufficiently

demonstrated its entitlement to a separate rate.

Plaintiff's Appendix, Pub.Doc. 52, p. 3. The staff verification

report indicates that the residents of Panjacun select 41 village

representatives who, in turn, elect five of their number to

comprise the village's "committee". See id. at 7. That committee

set up Huanri General with the approval of the Laizhou Industrial

and Commercial Administration Bureau for the purpose of selling

brake rotors and other parts and also set up other companies,

including HAP. The committee appointed the directors of those

firms and named its chairman as the chairman of Huanri General.

See id. at 7-8.

The petitioner, above-encaptioned, Coalition reacted to

this report, in part, as follows:

. . . [T]he fact that Huanri General is owned and

controlled by a Village Committee means that it is owned

or controlled by a governmental entity. Moreover,

information about the village system in China[] demonstrates that the responsibilities of the Village Committee go beyond what was disclosed by Huanri General. It

is commonly known by researchers and scholars that

villages in China are the lowest official level in

China's government and their leaders and committees are

assisted and controlled by the government. See A Tale of
Court No. 01-00825 Page 6

 

8 Plaintiff's Appendix, Pub.Doc. 56, pp. 5-6 (underscoring

and italics in original). A copy of each of the underscored

references is appended to this record document. 

2 Village[]s: China's 'Democracy' Shows Different Faces,

International Herald Tribune, (August 28, 2000). . . .

Village committees were instituted in 1987 with the

Organic Law on Village Committees in the P[RC]. Respondent did not provide a copy of this law to the [ITA],

which should have been required when it became apparent

that Huanri General was owned and controlled by the

Village Committee, and [] thus [] failed to affirmatively

demonstrate absence of de jure governmental control. The

village committees are responsible for supervising the

management of village affairs. See Anhui Villagers Supporting Rural Democracy, BBC Monitoring Asia Pacific

(June 19, 1998). . . . "A village committee is a selfgoverning organization that oversees public affairs and

public welfare, mediates public disputes, maintains

public order and assists the township government." See

Why China Practices Direct Election[] of Village Committees[,] Xinhua News Agency (April 12, 1997). . . . The

villagers also elect representatives who solicit opinions

from villagers on major affairs of the village. The

village representatives then elect five people for the

village committee, which decides how the village uses

profits from village-owned businesses, mediates civil

disputes and enforces governmental policies. See China

Villagers, AP Worldstream (April 2, 2000)(emphasis

added). . . .8

Whereupon the petitioner requested that the ITA deny a separate

antidumping-duty rate on the grounds that 

1. Huanri General is owned and controlled by a

disguised governmental entity, the Village Committee.

2. Huanri General withheld information related to

its ownership structure and dealings with the town

government.

* * *

4. The corrections of Huanri General, Huanri 

Auto . . . at the start and during verification are

so substantial that tainted [sic] the integrity of 

their overall responses.

Plaintiff's Appendix, Pub.Doc. 56, p. 22. 
Court No. 01-00825 Page 7

To the extent the petitioner's request also pertained to

another alleged new PRC shipper, the ITA concurred, but it does not

agree with regard to Huanri General, to wit:

. . . After examining the information provided by the

petitioner in the context of the laws we have examined in

previous NME proceedings, we do not have a sufficient

basis in this proceeding to conclude that the information

provided by the petitioner constitutes grounds for conclusively determining that collectively owned companies

(such as Huanri General) are controlled de jure by the

PRC government because the information noted above does

not directly relate to the company under review.

2. De Facto Control

As stated in previous cases, there is some evidence

that certain enactments of the PRC central government

have not been implemented uniformly among different

sectors and/or jurisdictions in the PRC. . . . Therefore, the Department has determined that an analysis of

de facto control is critical in determining whether the

respondents are, in fact, subject to a degree of governmental control which would preclude the Department from

assigning separate rates.

* * * 

. . . [T]he Department preliminarily finds that Huanri

General has demonstrated a de facto absence of government

control and is entitled to a separate rate for . . .

several reasons. As detailed in the verification report

and supported by documentation examined at verification,

Huanri General was set up by the Panjacun village

committee through capital voluntarily provided by all of

the inhabitants of Panjacun village. At verification,

the Department further clarified that the members of the

village committee were elected to the committee by the

villagers who also provided the capital to set up Huanri

General . . .. Data on the record establishes that the

villagers are the long-term investors/shareholders in

Huanri General and that the villagers determine via

election the individuals who serve on the village committee. Further, the villagers have entrusted the village committee to decide how and when Huanri General's

profits are to be distributed. In this case, the

villagers have in fact elected a group within the same
Court No. 01-00825 Page 8

village (i.e. the village committee) to handle the

business decisions and operation strategy of the company

which is wholly owned by all the villagers, some of whom

are also elected members of the village committee. Based

on these facts, we conclude that the central government

does not control Huanri General's export activities.

The petitioner contends . . . that the village

committee is a PRC government entity which has a financial relationship with the town government and that this

link constitutes government control of Huanri General's

operations. We have ruled in previous NME cases that

companies which are either owned by local or provincial

government entities or the managers of which are

appointed by the provincial, not the central, government

can also receive a separate rate if they sufficiently

demonstrate that they are entitled to one based on the

criteria set forth in Sparklers and amplified in Silicon

Carbide and Furfuryl Alcohol. For example, in one NME

case, the Department found that[,] although [] the local

government owned an exporting company, that company

elected its own management and was responsible for all

decisions such as determining export prices, allocation

and retention of profits on export sales, and negotiating

export sales contracts . . .. The Department also found

in another NME case that, although the provincial government appointed the management of a company, that company

was entitled to a separate rate because it was able to

demonstrate that it solely performed the de facto 

activities noted above and there was no evidence of significant government involvement in that company's

business operations . . ..

With respect to Huanri General, the data on the

record demonstrates that, unlike the situations which

existed in Lug Nuts and Pure Magnesium, we have no

evidence that this company is owned by the town government or that its management is appointed by the town

government. Rather, this company is ultimately owned by

the villagers of Panjacun village. Moreover, the president of the company (who is also the company's legal

representative on the company's business license and was

elected by the villagers as the chairman of the village

committee) appoints the managers. Consistent with the

facts in Pure Magnesium and Lug Nuts, Huanri General in

this case has also demonstrated that it is responsible

for all decisions such as determining export prices, allocation and retention of profits on export sales, and

negotiating export sales contracts. Although the village
Court No. 01-00825 Page 9

 

9 Brake Rotors From the People's Republic of China: Preliminary Results and Partial Rescission of the Fifth New Shipper

Review, 66 Fed.Reg. 29,080, 29,082-83 (May 29, 2001), citing,

among other precedent, Chrome-Plated Lug Nuts From The P[RC];

Preliminary Results of Antidumping Duty Administrative Review, 

60 Fed.Reg. 42,504 (Aug. 16, 1995), and Pure Magnesium From the

P[RC]: Final Results of Antidumping Duty New Shipper Administrative Review, 63 Fed.Reg. 3,085 (Jan. 21, 1998). The "NME" in

this determination is, of course, an abbreviation of "nonmarket

economy".

 

10 As indicated above, a second enterprise, Beijing Concord

Auto Technology Inc., was denied an individuated antidumping-duty

rate. See 66 Fed.Reg. at 44,332. 

committee actually decides how the company's profits are

to be distributed, we do not find that the village committee constitutes a form of central or provincial

government control over the company, especially since all

of the village committee members are investors in the

company.

We also are not convinced by the petitioner's argument that the village committee's dealings with the town

government constitute evidence that the town government

controls both the village committee's and Huanri General's operations. Based on our examination of the

village committee's financial records at verification, we

found that the village committee is an entity which

simply pays infrastructure taxes to the town government

and to which the town government owes money . . ..

Thus, in this case, the town government is a debtor to

the village committee. These activities are no different

than those of any company paying its taxes and operating

a business without government interference in the PRC.

Moreover, the information provided by Huanri General in

its response and amplified and/or clarified at verification supports a preliminary finding that there is de

facto absence of governmental control of the export

functions of Huanri General. . . . Consequently, we have

preliminarily determined that Huanri General has met the

criteria for the application of separate rates.9

A subsequent plea by the petitioner that the ITA reconsider this preliminary determination as to Huanri General10 was
Court No. 01-00825 Page 10

denied, with the agency reporting that "[a]ll issues raised in the

case briefs are addressed in the Decision Memo, which is . . .

adopted by this notice", Brake Rotors From the People's Republic of

China: Final Results and Partial Rescission of Fifth New Shipper

Review, 66 Fed.Reg. at 44,332. This action ensued pursuant to 28

U.S.C. §§ 1581(c), 2631(c).

II

The courts have affirmed the ITA's above-stated approach

of requiring that an NME entity like Huanri General "provide de

jure and de facto evidence of an absence of government control over

[it]s export activities." E.g., Sigma Corp. v. United States, 117

F.3d 1401, 1405-07 (Fed.Cir. 1997); Coalition for the Preservation

of American Brake Drum & Rotor Aftermarket Mfrs. v. United States,

23 CIT 88, 100-01, 44 F.Supp.2d 229, 242-43 (1999)[hereinafter

referred to as "Coalition Case II"].

Here, the plaintiff Coalition contends that the agency

did not fully follow its own, established approach. With regard to

the de jure test, it points out, inter alia, that the 

Chinese law that regulates the establishment and functioning of village committees . . . is the Organic Law of

the Village Committee of the P[RC] . . ., effective since

June 1st, 1988. . . . Huanri General did not provide to

the Department the Village Committee law, although Plaintiff brought this issue to the Department's attention in

a letter dated May 2, 2001, before the Department's

deadline for the preliminary determination, and again in

Plaintiff's case brief dated July 16, 2001. . . . The

failure of Huanri General to supply this law, which

appears to be easily obtainable since Plaintiff was able

to locate it, was a major omission in Huanri General's

response. 
Court No. 01-00825 Page 11

Plaintiff's Memorandum of Law, p. 9 (emphasis in original, citations omitted). As for the analysis de facto, the plaintiff argues that the ITA's verification report itself contains sufficient

evidence of government control of Huanri General to deny the

company a separate antidumping-duty rate. See generally id. at 10-

17. 

A

According to the court in Coalition Case II, to determine

whether or not de jure government control exists, the ITA examines

evidence of:

(1) An absence of restrictive stipulations associated with an individual exporter's business and export

licenses;

(2) any legislative enactments decentralizing control of companies; or 

(3) any other formal measures by the government

decentralizing control of companies.

23 CIT at 101, 44 F.Supp.2d at 242-43, citing Final Determination

of Sales at Less Than Fair Value: Sparklers from the People's

Republic of China, 56 Fed.Reg. 20,588 (May 6, 1991); Air Products

& Chemicals, Inc. v. United States, 22 CIT 433, 14 F.Supp.2d 737

(1998).

That kind of evidence is in short supply in the record at

bar. Rather, the defendant relies on the conclusions set forth in

the agency's Preliminary Results, supra, and then reformulated in
Court No. 01-00825 Page 12

 

11 See Plaintiff's Appendix, Pub.Doc. 77.

 

12 Defendant's Response in Opposition to Plaintiffs' Motion

for Judgment Upon the Agency Record [hereinafter referred to as

"Defendant's Memorandum"], p. 13, citing the Decision Memorandum,

p. 5.

 

13 Cf. 19 U.S.C. §§ 1677e(a) and (b) re consequences of

failure to produce requested information. Two other points

asserted in support of the ITA's determination de jure are out 

of place, to wit:

Commerce also verified that the Panjacun village

committee fell among those elected by the local

villagers and not those appointed by any level of 

the Chinese government[,]

and

Commerce explained that the agency's practice since 

1995 did not foreclose the use of separate rates for 

municipal or provincial government controlled exporters. 

Defendant's Memorandum, pp. 13-14. But they are relevant to the

analysis of de facto control. As this court has opined, it must

evaluate the validity of an ITA determination on the basis of the

reasoning presented in the decision itself. Neenah Foundry Co. v.

United States, 25 CIT , , 142 F.Supp.2d 1008, 1020-21 (2001),

relying on Hoogovens Staal BV v. United States, 24 CIT 44, 86 F.-

Supp.2d 1317 (2000).

. . . While the court will uphold a decision of lessthan-ideal clarity if the agency's path may be reasonably discerned, e.g., Colorado Interstate Gas Co. v.

FPC, 324 U.S. 581, 595 (1945), it may not conjure a

reasoned basis for the agency's action that Commerce

itself has not given. SEC v. Chenery Corp., 332 U.S.

194, 196-97 (1947). See also Hoogovens Staal BV v.

United States, 22 CIT 139, 142, 4 F.Supp.2d 1213, 1219

(1998).

Ibid.

the Issues and Decision Memorandum ("DecMemo")11 adopted by the

Final Results. Indeed, the defendant repeats the position now that

it was "unnecessary"12 to produce for examination the PRC's Organic

Law of the Village Committee.13 That is, "this law in and of itself

is not dispositive of de jure government control". Plaintiff's
Court No. 01-00825 Page 13

Appendix, Pub.Doc. 77 (DecMemo, p. 5). Perhaps, but the impression

the Preliminary Results attempt to foment, 66 Fed.Reg. at 29,082,

that the agency has "analyzed" this law is not supported by the

prior proceedings referred to therein, namely, Final Determination

of Sales at Less Than Fair Value: Furfuryl Alcohol From the

People's Republic of China, 60 Fed.Reg. 22,544 (May 8, 1995), and

Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination: Certain Partial-Extension

Steel Drawer Slides With Rollers from the People's Republic of

China, 60 Fed.Reg. 29,571 (June 5, 1995). Neither they nor any

other PRC-based proceedings appear to have considered that

country's village committee law in particular. Furfuryl Alcohol,

for example, refers to the Law of the P[RC] on Industrial Enterprises Owned by the Whole People (April 13, 1988), the Regulations

for Transformation of Operational Mechanism of State-Owned

Industrial Enterprises (Aug. 23, 1992), the Temporary Provisions

for Administration of Export Commodities (Dec. 21, 1992), and to

the Emergent Notice of Changes in Issuing Authority for Export

Licenses Regarding Public Quota Bidding for Certain Commodities

(April 1994). See 60 Fed.Reg. at 22,544. Steel Drawer Slides

added to this list the Law of the P[RC] on Chinese-Foreign

Contractual Joint Ventures (April 13, 1988) and the Foreign Trade

Law of the P[RC] (May 12, 1994). See 60 Fed.Reg. at 29,573. In

fact, of the five PRC laws referenced in the agency record now at

bar, only two, the 1988 law with regard to industrial enterprises
Court No. 01-00825 Page 14

owned by the whole people and the 1992 transformation regulations,

were apparently considered in those cited, prior ITA proceedings.

In short, defendant's attempted impression does not withstand this

court's scrutiny.

Moreover, the investigations in Furfuryl Alcohol and

Steel Drawer Slides entailed enterprises "owned by the whole 

people", the latter also involving joint ventures within the

purview of the above-noted PRC Administrative Regulations Governing

the Registration of Legal Corporations, whereas Huanri General

alleges itself to be a collectively-owned enterprise, another and

separate category of company according to those regulations.

Indeed, given that their six enumerated categories of endeavor are

set forth in the disjunctive, and only one thereof, number (5), is

deemed "private", it can be assumed that all the other kinds are

distinct forms of the Chinese people's business. That the ITA has

investigated some of them does not foreclose necessary inquiry as

to a different kind, not yet considered by the agency de jure. What

that other investigation does foreclose, however, is that a

reasonable mind might accept it on its face as adequate analysis of

a disparate legal status. Cf. Consolidated Edison Co. v. NLRB, 305

U.S. 197, 229 (1938).

Whatever the interpretation of the statutory standard of

review in trade cases like this per 19 U.S.C. §1516a(b)(1)(B)(i),

this court cannot and therefore does not conclude that the ITA's

refusal to even look at the PRC law that may well govern the kind
Court No. 01-00825 Page 15

of enterprise under review for the first time herein was in

accordance with law governing this case.

B

The plaintiff is of the view that the agency's separaterate test should not be limited to proving absence of nationalgovernment ownership but should be applied to whatever level of

governmental control is implicated. See Plaintiff's Memorandum of

Law, p. 5. The court concurs, given the broad statutory and concomitant administrative caution about a nonmarket economy, supra,

and the longstanding emphasis of the Communist Party on the "grass

roots" of China. See, e.g., Preface I to Socialist Upsurge in

China's Countryside (Sept. 25, 1955), V Selected Works of Mao TseTung, p. 237 (1st ed. Foreign Language Press Peking 1977). Indeed, as quoted above, the ITA's staff verification report

commences with the "significant" finding that Huanri General is

owned and controlled by the Panjacun village committee, which has

a relationship with the Tushan town government, and accordingly,

"the Department must consider whether the company sufficiently

demonstrated its entitlement to a separate rate." 

In its final analysis, the agency concedes that "the information in the record suggests that the village committee could

be a form of government depending on the township and/or province

in which it is located". Plaintiff's Appendix, Pub.Doc. 77

(DecMemo, p. 5). That analysis recites the representation of the
Court No. 01-00825 Page 16

 

14 Plaintiff's Appendix, Pub.Doc. 77 (DecMemo, p. 4).

 

15 66 Fed.Reg. at 29,082.

respondent Huanri General that the "townships are run by officials

who are selected by Communist Party-dominated local legislatures"14,

and this court understands that Shandong is one of China's most

important provinces for industry. See, e.g., Hong Kong Trade Development Council, Market Profiles on Chinese Cities & Provinces

(visited March 24, 2004)<http://www.tdctrade.com/mktprof/china/-

mpzhj.htm>. Hence, the ITA "determined that an analysis of de 

facto control is critical"15 in this matter and proceeded to point

out that it

typically considers four factors in evaluating whether

each respondent is subject to de facto governmental control of its export functions: (1) Whether the export

prices are set by, or subject to the approval of, a

governmental authority; (2) whether the respondent has

authority to negotiate and sign contracts and other

agreements; (3) whether the respondent has autonomy from

the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding the disposition of profits or

financing of losses.

66 Fed.Reg. at 29,082. Cf. Coalition Case II, 23 CIT at 101, 44

F.Supp.2d at 243. Such consideration led the staff to conclude

that Huanri General demonstrated a de facto absence of government

control of its export function and was therefore entitled to a

separate antidumping-duty rate. See Plaintiff's Appendix, Pub.

Doc. 77 (DecMemo, p. 5).
Court No. 01-00825 Page 17

 

16 Plaintiff's Appendix, Pub.Doc. 77 (DecMemo, p. 4).

 

17 Id. at 5. The Decision Memorandum also rejects the petitioner's contention that the Panjacun village committee is controlled by the Tushan town government. See id.

The dispositive Decision Memorandum upon which the ITA

finally relies barely addresses the foregoing four factors

postulated in the agency's Preliminary Results. Rather, it states

with approval the staff verification that Huanri General 

was set up by the Panjacun village committee through

capital voluntarily provided by all of the inhabitants of

Panjacun village.

Id. at 4 (emphasis added). This collectively-owned enterprise thus

may be a most-perfect form of communism in action. As such, there

would seem to be little room to differentiate between the business

of Huanri General and that of the village and governing village

committee, e.g.:

The financial records of Huanri General and the village

committee examined at verification all indicated that the

villagers have entrusted the village committee to decide

how and when Huanri General's profits are to be distributed. Specifically, the village committee has been entrusted to handle the business decisions and operation

strategy of the company which is wholly owned by all the

villagers, some of whom are also elected members of the

village committee.

Id. Whereupon the memorandum continues that these facts "suggest

that the central government does not control Huanri General's

export activities"16:

. . . Although the village committee actually decides how

the company's profits are to be distributed, we do not

find that the village committee constitutes a form of

central or provincial government control over the company, especially because all of the village committee

members are investors in the company.17
Court No. 01-00825 Page 18

But the linchpin to this thesis is missing, namely, the

village committee law, which may or may not be a promulgation of

the central government and which may or may not provide that

government or a subordinate, even grass-roots village, government

with ultimate, nonmarket control. In short, as is true de jure,

without the content of that law and the ITA's analysis of the

meaning thereof on the record herein, this court is unable to

affirm the foregoing de facto reasoning. This is the case now

because none of the prior cases cited by the defendant or reviewed

by the court has considered the nature and impact of that

particular law under the U.S. statute that requires the ITA to take

the extent of home-market government ownership or control carefully

into account. See 19 U.S.C. §1677(18)(B).

III

In view of the foregoing, plaintiff's motion for judgment

upon the agency record must be granted at least to the extent of

remand to the ITA for reconsideration of its determination to grant

Shandong Laizhou Huanri Group General Co. a separate antidumpingduty rate in the absence of the company's production of the PRC's

Organic Law of the Village Committee and any agency analysis

thereof. The defendant may have 90 days to reopen the record in

this regard and to report to the court the results of any reconsideration thereof, whereupon the plaintiff may comment within 30 days

of receipt.

So ordered.

Decided: New York, New York

April 1, 2004 Thomas J. Aquilino 

Judge