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

1677(18) to mean any foreign country that the [ITA] determines does notoperate 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 AttorneyGeneral; David M. Cohen , Director, and Lucius B. Lau , Assista nt Dir ector, Commercial Litigation Branch, Civil Division, U.S. Department o f Justice ( Stephen C. Tosini ); and Office of Chief Counsel for Import Administration, U.S. Department of Commerce ( Augusto Gue rra ), of counsel, for the defendant.

AQUIL INO, Judge: This case is cause to consider, y e tagain, the People's Republic of China ("PRC"), which the International Trade A dministration, 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 . TheCourt 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 o f Chin a: 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, truc ks, 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 roto r 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

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

3Plaintiff'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 orsole 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 Suchan application underlies this cas e. It was made pursuant to 19 U.S.C. §1675(a)(2)(B) and 19 C.F.R. §§ 351.214, 351.221 (2000) by Shando ng L aizhou 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 lia bi lity enterprise" 2and Huanri General as a "collectively owned enterprise" 3duly registered in Ch ina. The application certified that the export activities of both enterprises "are not controlled byCourt No. 01-00825 Page 4

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

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

6 Id
. 7 Id . at A-3. the central govern ment." 4Nonetheless, 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 establisheligibility for an antidumping duty rate separate from the country-wide rate provide de jure and de facto ev iden ce 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 reviewwill proceed. If, on the other hand, a respondent does not demonstrate its eligibility for a separate rate, then it will be deemed to be affilia ted wi th other companies that exported during the POI, and the review of that respondent will be rescinded.

Brake Rot ors Fr om 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 HA P, whi ch 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 an y 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, whichlies to the south and east of Beijing. A visit there by ITA staff led to the "significant" finding that Huanr i General is owned and controlled by the Panjac u n village c o mmittee which has a relationship with theTushan town government . . .. Accordingly, the Department must consider whether the company sufficiently demonstrated its entitlement to a separate rate.

Pla intiff'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 Admin istr ation 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 bya Village Committee means that it is owned or controlled by a governmental enti ty . Moreover, informat io n 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 sc holars that villages in China are the lowest off icial level in China's government and their leaders and committees are assisted and controlled by the government. See A Tale ofCourt No. 01-00825 Page 6

8Plaintiff'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 th e [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 WhyChina Practices Direct Election[] of Village Committees [,] Xinhua News Agency (April 12, 1997). . . . The villagers also elect representatives who solicit opinions fromvillagers on major affairs of the village. The village representatives then elect five pe op le for the village committee, whi ch d ecides 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 de ny 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 wi th 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 ITAconcurred, but it does not agree with regard to Huanri General, to wit:

. . . After examining t he inf ormation 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 informationprovided by the petitioner constitutes grounds for conclusively determining that collectively owned companies (suchas Huanri Gene ral ) 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 t he P RC 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 De partme nt preliminarily finds that Huanri General has demonstrated a de facto absence of government control and is entitled to a separate ra te for . . . several reasons. As detailed in the verification report and supported by documentation examined at verification, Huanri General was set up by the Panjacun vil lage committee through capital voluntarily provided by all of the inhabitants of Panjacun vi llage. At verification, the Department further clarified that the members of the village committee we re ele cted 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 t h e villagers determine via electi on the individuals who serve on the village committee. Further, the villagers have entrusted the village committee to decide how and when Huanri G eneral 's profits are to be distributed. In this case, the villagers have in fact elected a group within the sameCourt No. 01-00825 Page 8

village ( i

. e . the village committee) to handle the business decisions and operation strategy of the company whichis 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 villagecommittee is a PRC government entity which has a financial relationship withthe town government and that this link constitutes government control of Huanri General's op eratio ns. 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 su ffic iently demonstr ate that they are entitled to one based on the criteria set forthin Sparklers and amplified in Silicon Car bide 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 respons ible f or 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 . . .. Withrespect to Huanri General, the dat a on the record demonstrates that, unlike the situations which existed in Lug Nuts and Pure Magnesi um , we have noevidence that this company is owned by the town government or that its management is appointed by the town government. Rather, this companyis ultimately owned bythe villagers of Panjacun village. Moreover, the president of the company (who i s also the company's legal representative on the company's business license and was elected by the villagers as the chairman of the village committe e) appoints the managers. Consistent with the facts in Pure Magnesiumand Lug Nuts , Huanri General in this c ase has also demonstrated that it is responsible for all decisions such as determining export prices, allocation and retention of profits on export sa les, a nd negotiating export sales contracts. Although the villageCourt 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 theP[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 areto be distributed, we do not find that the village committee constitutes a form of central or provincial government control over the company, especiallysince all of the village committe e me mbers are investors in the company.We also are not convinced by the petitioner's argument that the village committee's dealings withthe town government constitute evidence that the town government co ntro ls 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 an d 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 th e PRC. Moreover, the information provided by Huanri General in its response and amplified and/or clarified at verification s up ports a preliminary finding that there is de facto absence of governmental control of the e xport functions of Huanri General. . . . Consequently, we have preliminarilydetermined that Huanri General has met the criteria for the application of separate rates. 9

Asubsequent plea by the petitioner that the ITA reconsider this preliminarydetermination as to Huanri General 10 wasCourt No. 01-00825 Page 10

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

case briefs are ad dresse d 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 .2 d 229, 242-43 (1999)[hereinafter referred to as " Coalition Case II "].

Here, the pl aintiff 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 establishme nt and functioning of village committees . . . is the Organic Law of the Village Committee of the P[RC] . . ., effective since June 1 st , 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 preliminarydetermination, 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 Hua nri General's response.Court No. 01-00825 Page 11

Plaintiff's Memora ndu m 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 eviden ce of government control of Huanri General to deny the companya 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 export er '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 inCourt No. 01-00825 Page 12

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

12Defendant'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 Memora ndum("DecMemo") 11 adopted by the Final Results . Indeed, the defendant repeats the position now that it was "unnecessary" 12to produce for examination the PRC's Organic Lawof the Village Committee. 13That is, "this law in and of itself is not dispositive of de jure government control". Plaint iff'sCourt 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 i s 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 PreliminaryDetermination 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). Neith er th ey nor any other PRC-based proceedings appear to have considered that country's village committee law in particular. Furfuryl Alcohol , fo r exampl e, 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 Te mp orary Provisions for Administration of Export Commodities (Dec. 21, 1992), and to the Emergent Notice of Changes in Issuing Authority for Export Lic ense s Regarding Public Quota Bidding for Certain Commodities (April 1994). See 6 0 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 Lawof the P[RC] (May 12, 1994). See 60 F ed .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 enterprisesCourt 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 purviewof the above-noted PRC Administrative Regulations Governing the Registration of Legal Corporatio ns, wh ereas Huanri General alleges itself to be a collectively-owned enterprise, another and separate category of company according to thos e r egulations. Indeed, given that their six enumerated categories of endeavor are set forth in the disjunctive, and onlyone thereof, number (5), is deemed "private", it can be assumed th at all t he 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 oth er i nvestigation 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 statutorystandard 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 kindCourt 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 viewthat the agency's separaterate test should not be limited to proving absence of nationalgovernment ow nershi p but should be applied to whatever level of governmental control is implicated. See Plaintiff's Memorandum ofLaw, 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 t o 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 verificat io n report

commences with the "significant " fi nding that Huanri General is owned and controlled by the Panjacun village committee, which has

a re lation ship with the Tushan town government, and accordingly,

" the Department must consider whether the company suffic ientl y demonstrated its entitlement to a separate rate."

In its final analysis, the agencyconcedes 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 theCourt No. 01-00825 Page 16

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

1566 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 Ch inese 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" 15in this matter and proceeded to point out that it typicallyconsiders four factors in evaluating whether eachrespondent is subject to de facto governmental control of its ex port functions: (1) Whether the export prices are set by, or subject to the approval of, a governmental authority; (2) whether the respondent has authorityto negotiate and sign contracts and o ther agreements; (3) whether the respondent has autonomy fromthe government in making decisions regarding the selection of management; an d (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 antid umpi ng-duty rate. See Plaintiff's Appendix, Pub. Doc. 77 (DecMemo, p. 5).Court No. 01-00825 Page 17

16Plaintiff'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 Memor an dum upon which the ITA finallyrelies 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 committ ee 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 commun ism 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 howand when Huanri General's profits are to be distributed. Specifically, the village committee has been entrusted to handle th e business decisions and operation strategyof 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 ar e t o be distributed, we do not find that the village committee constitutes a form of central or provi nc ial government control over the company, especiall y be cause all of the village committee members are investors in the company. 17Court 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 promu lgation of the central government and which may or may not provide that government or a subordinate, even grass-roots village, government withultimate, nonmarket control. In shor t, as is true de jure , witho ut the con tent of that law and the ITA's analysis of the meaning thereof on the record herein, this court is unable to

a ffirmthe foregoing de facto reasoning. This is the case n o w because none of the prior cases cited by the defendant or reviewed bythe court has considered the nature and impact of that particular law under the U.S. statute that requires the ITAto 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 leas t to t he extent of remand to the ITA for reconsideration of its determination to grantShandong 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 a gency 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