Slip Op. 15-77

UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________

:

FRESH GARLIC PRODUCERS :

ASSOCIATION, CHRISTOPHER :

RANCH, L.L.C., THE GARLIC :

COMPANY, VALLEY GARLIC, :

and VESSEY AND COMPANY, INC., :

:

Plaintiffs, :

:

v. : Before: Richard K. Eaton, Judge

:

UNITED STATES, : Court No. 13-00236

:

Defendant, :

:

and :

:

SHENZHEN XINBODA INDUSTRIAL :

CO., LTD. and HEBEI GOLDEN BIRD :

TRADING CO., LTD., :

:

Defendant-Intervenors. :

____________________________________:

OPINION

[The Department of Commerce’s Final Results are sustained.]

Dated: July 16, 2015

John M. Herrmann, Kelley Drye & Warren LLP, of Washington, DC, argued for 

plaintiffs. With him on the brief was Michael J. Coursey.

Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division, 

United States Department of Justice, of Washington, DC, argued for defendant. With him on the 

brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and

Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Justin Ross Becker,

Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, United States

Department of Commerce, of Washington, DC.
Court No. 13-00236 Page 2

Gregory S. Menegaz, deKieffer & Horgan, PLLC, of Washington, DC, argued for 

defendant-intervenor Shenzhen Xinboda Industrial Co., Ltd. With him on the brief was J. Kevin 

Horgan.

Robert T. Hume, Hume & Associates LLC, of Ojai, CA, argued for defendant-intervenor 

Hebei Golden Bird Trading Co., Ltd.

EATON, Judge: Before the court is the USCIT Rule 56.2 motion for judgment on 

the agency record of plaintiffs Fresh Garlic Producers Association and several of its individual 

members, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and 

Company, Inc. (collectively, “plaintiffs”). Pls.’ Mot. for J. on the Agency R. (ECF Dkt. No. 35). 

By their motion, plaintiffs challenge the United States Department of Commerce’s (“Commerce” 

or the “Department”) final results of the seventeenth annual administrative review of the 

antidumping duty order on fresh garlic from the People’s Republic of China (“PRC”). Fresh 

Garlic From the PRC, 78 Fed. Reg. 36,168 (Dep’t of Commerce June 17, 2013) (final results of 

antidumping duty administrative review; 2010–2011), and accompanying Issues and Decision 

Memorandum, PD 297 at bar code 3139858-01 (June 10, 2013), ECF Dkt. No. 28 (“Issues & 

Dec. Mem.”) (collectively, “Final Results”). 

Defendant-intervenors Shenzhen Xinboda Industrial Co., Ltd. (“Xinboda”) and Hebei 

Golden Bird Trading Co., Ltd. (“Golden Bird”) (together, “mandatory respondents” or 

“respondents”) are the two largest exporters of Chinese fresh garlic by volume and were the two 

mandatory respondents selected by Commerce for individual examination in the administrative 

review. Mem. from Christian Marsh to Ronald K. Lorentzen at 3, PD 189 at bar code 3108743-

01 (Dec. 3, 2012), ECF Dkt. No. 28.

Plaintiffs argue that the source Commerce selected to establish the price for the surrogate 

value of the raw garlic bulbs was less specific to the level of trade at which respondents 

purchased their garlic bulbs than other record evidence. See Mem. of Law in Supp. of Pls.’ Mot. 
Court No. 13-00236 Page 3

for J. on the Agency R. 25 (ECF Dkt. No. 35-1) (“Pls.’ Br.”). Thus, according to plaintiffs, the 

value was not based on the best available information as to the surrogate price for the raw garlic 

bulbs. Defendant United States and mandatory respondents maintain, among other things, that, 

because the selected source used to price the garlic bulbs was based on a broad market average, it 

represented the best available information. See Def.’s Resp. to Pls.’ Mot. for J. upon the Agency 

R. 1–2, 5 (ECF Dkt. No. 39); Def.-int. Shenzhen Xinboda Industrial Co., Ltd.’s Resp. to Pls.’ 

Mot. for J. upon the Agency R. 1 (ECF Dkt. No. 41); Resp. of Def.-int. Hebei Golden Bird 

Trading Co., Ltd. to Pls.’ Mot. for J. on the Agency R. 2 (ECF Dkt. No. 40). The court has 

jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii).

For the reasons set forth below, the Final Results are sustained.

BACKGROUND

In 1994, Commerce issued an antidumping duty order on imports of fresh garlic from the 

PRC. Fresh Garlic From the PRC, 59 Fed. Reg. 59,209 (Dep’t of Commerce Nov. 16, 1994)

(antidumping duty order) (the “Order”).1 On November 30, 2011, plaintiffs asked Commerce to 

conduct an administrative review of the Order. Letter from Michael J. Coursey & John M. 

Herrmann, Kelley Drye & Warren LLP, to Secretary of Commerce, U.S. Department of 

Commerce at 1, PD 12 at bar code 3043695-01 (Nov. 30, 2011), ECF Dkt. No. 28. Commerce 

then began its seventeenth annual administrative review of the Order for the period of review

1 The products subject to the Order “are all grades of garlic, whole or separated into 

constituent cloves, whether or not peeled, fresh, chilled, frozen, provisionally preserved, or 

packed in water or other neutral substance, but not prepared or preserved by the addition of other 

ingredients or heat processing. The differences between grades are based on color, size, 

sheathing and level of decay.” Order, 59 Fed. Reg. at 59,209.

 
Court No. 13-00236 Page 4

November 1, 2010 through October 31, 2011 (“POR”), choosing Golden Bird and Xinboda as 

mandatory respondents. See Issues & Dec. Mem. 1, 4.

During the review, as proposed sources from which to calculate the surrogate value for 

the raw garlic bulbs, the primary input for the subject merchandise, the parties placed on the 

record several sets of data from various sources, including (1) 2009 Ukrainian garlic producer 

prices provided by the United Nations’ Food and Agricultural Organization’s Statistical Division 

(“FAO”)2 and (2) daily garlic prices from eight regional markets in Ukraine during the POR, 

published by Fruit-Inform3 (“FI”). See Mem. from David Lindgren, International Trade 

Compliance Analyst, to The File at 4, PD 193 at bar code 3108863-02 (Dec. 3, 2012), ECF Dkt. 

No. 28 (“Prelim. Surrogate Values Mem.”).

In the Final Results, Commerce found that the FAO price “represent[ed] the broadest 

market average” because it was “a single annual price intended to represent all Ukrainian garlic 

production.” Issues & Dec. Mem. at 15. Commerce concluded that the FAO price represented a 

broader market average than the FI data because “while the FI price data represent[ed] 18 

2 The FAO data is “compiled with the cooperation of governments, who provide 

the data in the form of replies to annual . . . questionnaires,” and is comprised of “prices received 

by farmers (called Producer prices) for primary crops . . . at the point of initial sale (prices paid at 

the farm-gate).” Issues & Dec. Mem. at 13 (quoting Letter from Gregory S. Menegaz, deKieffer 

& Horgan, PLLC, to Hon. Rebecca M. Blank, Acting Secretary of Commerce at Ex. 8, PD 140 at 

bar code 3091369-03 (Aug. 10, 2012), ECF Dkt. No. 28) (internal quotation marks omitted).

The FAO website, however, “notes that, when countries do not collect farm-gate prices, they also 

may provide wholesale prices and unit values compiled for national accounts.” Issues & Dec. 

Mem. at 13.

3 “Fruit-Inform . . . is [a] consulting fruit and vegetable business agency” that 

“provides services to agrarian companies throughout the world and specializes in market 

information, market analyses, and in coordinating and organizing high-profile fresh produce 

industry events.” About Us, FRUIT-INFORM, http://www.fruit-inform.com/en/about (last visited 

June 24, 2015).

 
Court No. 13-00236 Page 5

percent of all Ukrainian production, the [FAO] price [was] intended to represent all Ukrainianproduced garlic.” Issues & Dec. Mem. at 15.

Commerce also found that, although the FAO price was “intended to be a farmgate 

price,” i.e., a price that includes the costs of production, but not additional costs such as 

processing, it “may reflect some other measures as well,” i.e., could reflect some shipping,

processing, or storage of the garlic bulbs.4 See Issues & Dec. Mem. at 14. As to the FI prices,

Commerce characterized these as being closer to wholesale prices, because the garlic had gone 

4 Commerce seems to have based this finding on information from the FAO 

website:

The [FAO] data are compiled with the cooperation of governments, who provide 

the data in the form of replies to annual FAO questionnaires. These data are 

“prices received by farmers (called Producer prices) for primary crops . . . at the 

point of initial sale (prices paid at the farm-gate).” The [FAO] website notes that, 

when countries do not collect farm-gate prices, they also may provide wholesale 

prices and unit values compiled for national accounts. Likewise, the organization 

notes that, in some cases, the data provided in the questionnaire responses are also 

supplemented with official country publications and institutional databases.

Issues & Dec. Mem. at 13 (alteration in original) (footnotes omitted) (quoting Letter from 

Gregory S. Menegaz, deKieffer & Horgan, PLLC, to Hon. Rebecca M. Blank, Acting Secretary 

of Commerce at Ex. 8, PD 140 at bar code 3091369-03 (Aug. 10, 2012), ECF Dkt. No. 28 

(“FAO Submission”)). Indeed, the FAO website printout on the record states that “[w]hen 

countries do not collect farm-gate prices they provide an alternative set of data, mainly: (1) 

wholesale prices; (2) unit values compiled for national accounts.” FAO Submission. The court 

notes that plaintiffs are correct that, because the FAO website printout on the record states that 

reported wholesale prices are indicated as such, the FAO data does not likely include wholesale 

prices. See FAO Submission (“In a few cases, countries have supplied wholesale prices. These 

exceptions are documented in connection with the countries in question (footnotes).”). In other 

words, there is at least some indication that, when reported prices are not farmgate prices, it is 

noted. The printout on the record, however, does not state that any other “alternative” or 

supplemental data would be clearly identified as such. Moreover, the FAO website submission 

does reveal the potential for “other measures” to be reflected in its prices in a list of limitations, 

including differences between countries as to point-of-sale, product-specific practices, and 

“methods of arriving at national averages.” See FAO Submission. Thus, as Commerce noted,

the exact level of trade and processing of the garlic sold for the prices reported to the FAO, and 

on which the average Ukrainian price used here was based, is not clearly stated.

 
Court No. 13-00236 Page 6

through “some level of preparation, transport and possibly storage” prior to sale. See Issues & 

Dec. Mem. at 14. 

As to the level of trade at which mandatory respondents acquired their garlic bulbs,

Commerce found “that the raw garlic purchased by both Golden Bird and Xinboda [was] not 

farmgate in nature.” Issues & Dec. Mem. at 15. As shall be seen, this conclusion was based on 

the Department’s finding that the raw garlic had undergone at least some processing. When it 

tried to match the level of trade of mandatory respondents’ purchases to the surrogate value on 

the record, therefore, Commerce concluded that both the FAO and FI prices were at a different 

level of trade than those purchases and the Department did not have enough information to 

determine which one was more similar to respondents’ purchases. See Issues & Dec. Mem. at 

15. In other words, for Commerce, neither source represented data at precisely the level of trade 

at which the respondents bought their garlic.

Relying on the FI data, in the Preliminary Results, Commerce calculated weighted 

average margins of $1.96/kg for Xinboda and $1.65/kg for Golden Bird. Fresh Garlic From the 

PRC, 77 Fed. Reg. 73,980, 73,981 (Dep’t of Commerce Dec. 12, 2012) (preliminary results of 

antidumping duty administrative review; 2010–2011) (“Preliminary Results”). In the Final 

Results, however, Commerce relied on the FAO data for garlic bulb input prices and calculated 

dumping margins of zero for both mandatory respondents. Final Results, 78 Fed. Reg. at 36,169.

STANDARD OF REVIEW

“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). “Substantial evidence is ‘such relevant evidence as a reasonable 
Court No. 13-00236 Page 7

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. of N.Y. v. 

NLRB, 305 U.S. 197, 229 (1938)). “The existence of substantial evidence is determined ‘by 

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

detracts from the substantiality of the evidence.’” Fuyao Glass Indus. Grp. Co. v. United States,

30 CIT 165, 167 (2006) (quoting Huaiyin, 322 F.3d at 1374) (internal quotation marks omitted). 

The court’s function, however, “is not to reweigh the evidence but rather to ascertain ‘whether 

there was evidence which could reasonably lead to the [agency’s] conclusion.’” See Am. 

Bearing Mfrs. Ass’n v. United States, 28 CIT 1698, 1700, 350 F. Supp. 2d 1100, 1104 (2004)

(quoting Matsushita Elec. Indus. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984)).

Moreover, “[t]he possibility of drawing two equally justifiable, yet inconsistent conclusions from 

the record does not prevent the agency’s determination from being supported by substantial 

evidence.” Zhejiang Native Produce & Animal By-Products Imp. & Exp. Grp. Corp. v. United 

States, 32 CIT 673, 674 (2008) (citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966); 

Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004)).

DISCUSSION

I. LEGAL FRAMEWORK

As part of its unfair trade regime, “[t]he United States imposes duties on foreignproduced goods that are sold in the United States at less-than-fair value.” Clearon Corp. v. 

United States, 37 CIT __, __, Slip Op. 13-22, at 4 (2013). Under 19 U.S.C. § 1675(a)(1)(B),

once an antidumping duty order has been issued, “[a]t least once during each 12-month period 

beginning on the anniversary of the date of publication of . . . an antidumping duty order,” 
Court No. 13-00236 Page 8

Commerce shall, upon request and after publication of notice of review, “review, and determine . 

. . the amount of any antidumping duty.” 19 U.S.C. § 1675(a)(1)(B). The Department is 

responsible for making the fair value determination, and is directed by statute to make a 

“comparison . . . between the export price or constructed export price[5] and normal value.[6]” Id.

§ 1677b(a). Where, as here, the merchandise in question is exported from a nonmarket economy 

country,7 “the normal value of the subject merchandise [is based on] the value of the factors of 

production utilized in producing the merchandise and [an] added . . . amount for general 

5 “Export price” and “constructed export price” are defined as follows:

The term “export price” means the price at which the subject merchandise 

is first sold (or agreed to be sold) before the date of importation by the producer 

or exporter of the subject merchandise outside of the United States to an 

unaffiliated purchaser in the United States or to an unaffiliated purchaser for 

exportation to the United States . . . . 

. . . .

The term “constructed export price” means the price at which the subject 

merchandise is first sold (or agreed to be sold) in the United States before or after 

the date of importation by or for the account of the producer or exporter of such 

merchandise or by a seller affiliated with the producer or exporter, to a purchaser 

not affiliated with the producer or exporter . . . . 

19 U.S.C. § 1677a(a), (b).

6 “The [normal value] of subject merchandise is ‘the price at which the foreign . . . 

product is first sold . . . for consumption . . . in the usual commercial quantities and in the 

ordinary course of trade . . . at the same level of trade as the export price . . . .’” Sichuan 

Changhong Elec. Co. v. United States, 30 CIT 1481, 1485, 460 F. Supp. 2d 1338, 1343 (2006) 

(alterations in original) (quoting 19 U.S.C. § 1677b(a)(1)(B)(i)). 

7 A nonmarket economy country is a “foreign country that the [Department] 

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.” 19 U.S.C. § 

1677(18)(A). Because the Department deems the PRC “to be a nonmarket economy country, 

Commerce generally considers information on sales in [the PRC] and financial information 

obtained from Chinese producers to be unreliable for determining, under 19 U.S.C. § 1677b(a), 

the normal value of the subject merchandise.” Shanghai Foreign Trade Enters. Co. v. United 

States, 28 CIT 480, 481, 318 F. Supp. 2d 1339, 1341 (2004).

 
Court No. 13-00236 Page 9

expenses and profit plus the cost of containers, coverings, and other expenses.” Id. §

1677b(c)(1).

To value the factors of production in a nonmarket economy situation, Commerce is 

directed to use “the best available information regarding the values of such factors [of 

production] in a [comparable] market economy country or countries considered to be appropriate 

by the [Department].” Id. The Department’s task is to “attempt to construct a hypothetical 

market value” of the subject merchandise in the nonmarket economy. Nation Ford Chem. Co. v. 

United States, 166 F.3d 1373, 1375 (Fed. Cir. 1999).

As it has done in the past and because “Golden Bird and Xinboda reported raw garlic 

bulb[] inputs, rather than garlic seed and growing factors, as [factors of production],” the 

Department “applied an intermediate input methodology to the [normal value] calculation.” See 

Prelim. Surrogate Values Mem. at 2; see also Mem. from David Lindgren, International Trade 

Compliance Analyst, to Nicholas Czajkowski, Acting Program Manager at 2, PD 192 at bar code 

3108863-01 (Dec. 3, 2012), ECF Dkt. No. 28 (“Intermediate Input Methodology Mem.”) (“In 

this review, [Golden Bird] and [Xinboda] have reported in their questionnaire responses that 

their respective processors purchased raw garlic bulbs, the intermediate input, from local farmers 

and suppliers to produce the merchandise under review. As such, rather than attempt to 

construct the costs of production to arrive at a value of raw garlic bulb inputs, the Department 

will instead apply [surrogate values] to the raw garlic bulb in the [normal value] calculation.”).

“In other words, rather than basing normal value on the sum of the surrogate values for the 

upstream factors of production reported by respondents, such as costs associated with leasing 

land, fertilizer, irrigation, labor, and the like, Commerce assumed that these costs were all 
Court No. 13-00236 Page 10

contained in the price of the intermediate product,” here, the raw garlic bulb. See Qingdao Sealine Trading Co. v. United States, 37 CIT __, __, Slip Op. 13-102, at 6 (2013).

Commerce selected data from Ukraine because (1) it was among the countries the 

Department had identified as economically comparable to the PRC, (2) it was a significant 

producer of comparable merchandise, and (3) there was Ukrainian data Commerce could use to 

value the factors of production that was “both available and reliable.” See Issues & Dec. Mem. 

at 11 (“Once the Department has identified the countries that are the most economically

comparable to the PRC, it identifies those countries which are significant producers of

comparable merchandise. From the countries which are both economically comparable and

significant producers the Department will then select a primary surrogate country based upon

whether the data for valuing [factors of production] are both available and reliable.”); see also 19

U.S.C. § 1677b(c)(4)(A) (“The [Department], in valuing factors of production . . . shall utilize, to 

the extent possible, the prices or costs of factors of production in one or more market economy 

countries that are . . . at a level of economic development comparable to that of the nonmarket 

economy country . . . .”).

II. THE DEPARTMENT’S SELECTION OF THE SURROGATE VALUE FOR THE RAW GARLIC 

BULB INPUTS IS SUPPORTED BY SUBSTANTIAL EVIDENCE

In the Final Results, using its intermediate input methodology, Commerce selected a 

surrogate value for raw garlic bulbs from Ukraine based on the FAO price information. Because 

the information was for the period January 1, 2009 to December 31, 2009 and, thus, not precisely 

contemporaneous with the POR (November 1, 2010 through October 31, 2011), it then indexed 

the price using the Ukrainian Consumer Price Index. See Letter from David Lindgren, 
Court No. 13-00236 Page 11

International Trade Compliance Analyst, to The File at 2, PD 299 at bar code 3139936-01 (June 

10, 2013), ECF Dkt. No. 28.

Prior to its decision to use the FAO data, Commerce evaluated the proposed sources for 

raw garlic bulb prices on the record according to the five factors it typically considers when 

selecting the best available information: (1) public availability, (2) product specificity, (3) broad 

market average, (4) tax and duty exclusivity, and (5) contemporaneity of the data. Issues & Dec. 

Mem. at 12–17; see also Jining Yongjia Trade Co. v. United States, 34 CIT 1510, 1521 (2010) 

(citation omitted).

Plaintiffs challenge Commerce’s determination to use the FAO data, rather than the FI 

data, to calculate the surrogate value for the raw garlic bulb inputs. At the outset, the court notes 

that no party challenges Commerce’s finding that both the FAO and FI data are publicly 

available and reflect prices specific to the type of garlic that mandatory respondents buy.8

Further, no party disputes Commerce’s finding that the FAO data is tax exclusive and that it

represents the broadest market average. Rather, here, plaintiffs argue that the Department’s 

selection of the FAO data is unsupported by substantial evidence because the data (1) reflects 

“farmgate” prices that “[a]re [n]ot [s]pecific to the [l]evel of [t]rade [a]t [w]hich the 

[r]espondents[] . . . [a]cquire [i]nput [b]ulbs” and (2) is not contemporaneous with the POR. See 

Pls.’ Br. 25, 29.

8 Because Commerce “found that garlic harvested in Ukraine is typically of the 

large variety that is similar to respondents’ Chinese garlic and no party [had] contest[ed] this 

conclusion,” the Department found that “both the FI and [FAO] prices for Ukrainian garlic 

[were] specific to Chinese garlic.” See Issues & Dec. Mem. at 13, 15. Indeed, “[p]laintiffs do

not contest the Department’s findings with respect to the physical comparability of fresh garlic 

grown in Ukraine and China.” Pls.’ Br. 18.

 
Court No. 13-00236 Page 12

A. The FAO Data is the Best Available Information

1. Broad Market Average

While there is no particular hierarchy employed by Commerce when assessing the five 

factors it typically uses when selecting the best available information to value factors of 

production, at times consideration of one factor can largely direct the Department’s decision. 

Such is the case here. 

With respect to broad market average, Commerce determined that the FAO price 

represents a broader market average for the raw garlic bulb input than the FI price. In the Final 

Results, Commerce determined that the “[FAO] price . . . represent[s] the broadest market 

average” because “the [FAO] price is a single annual price intended to represent all Ukrainian 

garlic production,” whereas the FI price data only accounts for 18 percent of all Ukrainian garlic 

production. Issues & Dec. Mem. at 15. Commerce then stated that, in its Preliminary Results, it

“used the FI data because [it had] found its eight markets, spread throughout the country, 

represented a broad market average,” but that the Department had since discovered by way of “a 

declaration by the director of FI . . . that the FI prices represent about 18 percent of all garlic 

cultivated in Ukraine.” Issues & Dec. Mem. at 15. This finding is supported by a letter on the 

record from FI’s “Head of Project,” which “caution[s] that merely 18% of fresh garlic cultivated 

in Ukraine arrives at the wholesale markets reported by [FI].” Letter from Gregory S. Menegaz,

deKieffer & Horgan, PLLC, to Hon. Rebecca M. Blank, Acting Secretary of Commerce at Ex. 1 

at 2, PD 216 at bar code 3119135-01 (Feb. 12, 2013), ECF Dkt. No. 28.

Commerce supported its finding that the FAO price was intended to represent all 

Ukrainian garlic production by referencing the FAO website submission on the record. See

Issues & Dec. Mem. 13, 15; see also Letter from Gregory S. Menegaz, deKieffer & Horgan, 
Court No. 13-00236 Page 13

PLLC, to Hon. Rebecca M. Blank, Acting Secretary of Commerce at Ex. 8, PD 140 at bar code 

3091369-03 (Aug. 10, 2012), ECF Dkt. No. 28 (“FAO Submission”) (“FAO collects annually the 

average prices from the countries on an annual basis. . . . The concept ‘prices received by 

farmers’ in the present data series refers to the national average prices of individual commodities 

comprising all grades, kinds and varieties received by farmers in the nearest market.”). 

Because the FAO price, as a national average annual price, represents all Ukrainian garlic 

production over the entire year, while the FI price only accounts for a small fraction of Ukrainian 

garlic production from regional markets, it was reasonable for Commerce to find that the FAO 

price represents a broader market average than the FI data and to favor the use of the FAO data 

to value the raw garlic bulbs. See Ad Hoc Shrimp Trade Action Comm. v. United States, 618 

F.3d 1316, 1322 (Fed. Cir. 2010) (“Commerce’s policy on using countrywide data, whenever 

available, is reasonable, as such data gives a broad overview of the relevant market.”); Jining 

Yongjia, 34 CIT at 1527–28 (noting that “it is Commerce’s practice to use country-wide data 

instead of regional data when the former is available” and finding Commerce’s decision to use 

data as a broad market average to be supported by substantial record evidence (citations 

omitted)); see also Jacobi Carbons AB v. United States, 38 CIT __, __, 992 F. Supp. 2d 1360, 

1368–69 (2014) (finding prices from a publication lacking countrywide data to be less 

representative of broad market averages than nationwide data for imports that entered the 

surrogate country from its global trading partners); Since Hardware (Guangzhou) Co. v. United 

States, 37 CIT __, __, 911 F. Supp. 2d 1362, 1377 (2013) (stating that Commerce explained that 

two data sources were “deficient,” in part, by “fail[ing] to represent a broad market average 

because they [were] from only two companies”).
Court No. 13-00236 Page 14

Here, only a small proportion of the Ukrainian garlic bulb market is reflected in the FI 

data and that the data is based on regional prices, whereas the FAO data is for the whole country 

and represents an average price for all domestic garlic production. Thus, it is apparent, and no 

party disputes, that the broad market average factor strongly supports Commerce’s selection of 

the FAO data over the FI data.

2. Tax and Duty Exclusivity

The tax exclusivity factor also favors the Department’s determination. In the Final 

Results, Commerce found that, based on the record evidence, the FAO price was tax exclusive, 

but that “there [was] some lack of clarity regarding” whether the FI prices were tax exclusive. 

See Issues & Dec. Mem. at 16.

Specifically, Commerce found that,

[w]ith respect to the [FAO] price, we concur with Xinboda that it 

necessarily must be tax exclusive, based on the statement on the [FAO’s] website 

which states that “[p]rices of agricultural products and by-products have a 

significant influence on formulation of production plans and policy decisions 

relating to taxes levied on agricultural income and subsidies provided to farmers 

on agricultural inputs.” It is reasonable to conclude that the [FAO] price would 

be tax exclusive if the data is utilized for the purposes of levying taxes. 

Accordingly, record evidence leads the Department to a determination that the 

[FAO] price is, in fact, tax exclusive.

Issues & Dec. Mem. at 16–17 (alteration in original) (footnote omitted) (quoting FAO 

Submission). Regarding the FI prices, on the other hand, Commerce found that

FI’s director clearly states on the record of this proceeding that the FI prices are 

tax exclusive because the small farmers and traders selling at the markets captured 

by FI are not required to pay VAT.[9] [Nonetheless,] Golden Bird contends that 

9 “The VAT, or the value-added tax, is ‘[a] tax on the estimated market value added 

to a [product] or material at each stage of its manufacture or distribution, ultimately passed on to 

the consumer,’” which “is normally a percentage of the estimated market value added.” Beijing 

 

(footnote continued)
Court No. 13-00236 Page 15

because Ukraine law requires a 20 percent VAT on agricultural products, the FI 

prices are obligated to include taxes. No party disagrees with the fact that 

Ukrainian law requires 20 percent VAT to be paid on agricultural products. 

However, FI’s director states that the prices reported by FI are exclusive of VAT 

and no party has provided any evidence which demonstrates that any of the FIreported prices are, in fact tax inclusive. While Xinboda does contend that 

because commercial farmers are selling garlic through markets reported by FI 

(their distance sales would necessarily include VAT), it is not clear that the 

distance sales made by commercial farmers in Ukraine are inclusive of VAT. 

Issues & Dec. Mem. at 16 (footnotes omitted) (citing Letter from Michael J. Coursey & John M. 

Herrmann, Kelley Drye & Warren LLP, to Acting Secretary of Commerce at Ex. 1 ¶ 11, PD 248

at bar code 3119204-01 (Feb. 12, 2013), ECF Dkt. No. 28. (“FI Decl.”)). Faced with evidence 

that (1) the FI director stated that the FI prices are tax exclusive, (2) it was clear that a 20 percent 

VAT was required by law, and (3) the argument that sales away from the farmgate must have 

included the VAT, Commerce determined that the record was unclear as to whether the FI garlic 

bulb prices are tax exclusive. See Issues & Dec. Mem. at 16 (“Therefore, while there is some 

lack of clarity regarding the VAT in FI, it is . . . uncontested that [FAO] data are tax exclusive.”).

Commerce’s findings regarding the tax exclusivity of the data were not unreasonable. 

Given the statement on the FAO website that “[p]rices of agricultural products and by-products 

have a significant influence on . . . policy decisions relating to taxes levied on agricultural 

income,” Commerce’s conclusion that, because the FAO data was used in levying taxes, it must 

be tax exclusive, was not unreasonable. See FAO Submission. Further, the court agrees with 

Commerce that the record is somewhat unclear as to whether the FI data is tax exclusive because 

Ukrainian law requires 20 percent VAT to be paid on agricultural products, such as those sold at 

the markets reporting to FI. Thus, while by no means free of ambiguity, and not as determinative

Tianhai Indus. v. United States, 39 CIT __, __ n.12, 52 F. Supp. 3d 1351, 1357 n.12 (2015)

(alteration in original) (quoting AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE

1900 (4th ed. 2000)). 

 
Court No. 13-00236 Page 16

as the broad market average factor, the tax exclusivity factor modestly favors Commerce’s 

findings.

3. Level of Trade and Contemporaneity

As noted, plaintiffs argue that the Department’s selection of the FAO data is unsupported 

by substantial evidence because the data is (1) for sales of garlic at a different level of trade than 

mandatory respondents’ garlic bulb inputs and (2) not contemporaneous with the POR. 

In the context of their level of trade argument, plaintiffs maintain that “the Department’s

reliance on the . . . prices for fresh garlic in Ukraine, as published by the FAO, is inconsistent 

with its findings in the immediately prior [fifteenth] and [sixteenth] administrative reviews,” and, 

further, in the seventeenth review (i.e., for the POR), that Xinboda and Golden Bird did not 

purchase raw garlic bulbs at the farm gate. See Pls.’ Br. 18. Thus, plaintiffs’ argument is that 

the Department should not have relied on the FAO “farmgate” data because it (1) relied on 

wholesale price data in the two immediately preceding reviews and (2) determined that, in this 

review, mandatory respondents’ garlic bulb inputs were not obtained at the farm gate.

Plaintiffs also argue that Commerce’s “decision to use the non-contemporaneous FAO 

data over the contemporaneous [FI] data is . . . not based on substantial . . . evidence.” Pls.’ Br. 

29. To support this argument, plaintiffs point to Commerce’s statement in the Final Results that 

it generally “prefers contemporaneous data over non-contemporaneous data, all other factors 

being equal.” Pls.’ Br. 29 (quoting Issues & Dec. Mem. at 15–16) (internal quotation marks 

omitted).

With respect to the fifteenth and sixteenth annual reviews, plaintiffs are correct that 

Commerce relied on wholesale (not farmgate) prices when constructing normal value. See Fresh 
Court No. 13-00236 Page 17

Garlic From the PRC, 76 Fed. Reg. 37,321 (Dep’t of Commerce June 27, 2011) (final results and 

final rescission, in part, of the 2008–2009 antidumping duty administrative review), and 

accompanying Issues and Decision Memorandum at cmt. 3; Fresh Garlic from the PRC, 77 Fed. 

Reg. 34,346 (Dep’t of Commerce June 11, 2012) (final results of the 2009–2010 administrative 

review of the antidumping duty order), and accompanying Issues and Decision Memorandum at 

cmt. 5.10

10 The Department stated in the sixteenth review that 

[t]he fact that a significant portion of the raw garlic inputs processed by 

the respondents must have also been cold/[cold atmosphere] stored further 

demonstrates that neither company makes its purchases at farmgate prices. 

Xinboda has stated that “in the months other than the harvest season, [Xinboda’s 

processor] also purchased from farmers who rented space and stored the raw 

garlic inputs in cold storage facilities. . . .” Golden Bird has similarly stated that 

“no matter how long the raw garlic was kept in cold storage, the costs had been 

included in the purchase price” paid by Golden Bird’s processor . . . . As noted in 

Xinboda’s statement, farmers rented space for cold storage thus indicating that the 

cold storage facilities were not located on the farms that supplied the raw garlic 

inputs. While there is no evidence on the record showing where the cold storage 

facilities that stored the raw garlic inputs purchased by the respondents were 

located, the fact that the very use of the storage facilities would have resulted in 

additional costs being incurred on the part of the seller. Therefore, that both 

respondents report purchasing raw garlic inputs from local farmers does not 

address the issue that these local farms had to clean, sort and bag the harvested 

raw garlic, rent space to store the raw garlic, cover the costs of storing the raw 

garlic (i.e., electricity, labor) and pay for the transportation and other related costs 

of moving the raw garlic to the cold storage facility and then sometimes 

delivering the raw garlic inputs from the cold storage facility to the respondent’s 

processing plants. Regardless of the amount of the costs involved, it is reasonable 

to conclude that the party incurring these costs would have added them to any 

price charged for the corresponding garlic; Golden Bird’s statements support this 

conclusion. As such, the prices paid by the respondents for any raw garlic inputs 

are not farmgate prices as defined in Jinan Yipin.

Fresh Garlic from the PRC, 77 Fed. Reg. 34,346, and accompanying Issues and Decision 

Memorandum at cmt. 5 (alteration in original) (footnotes omitted) (citation omitted).

 
Court No. 13-00236 Page 18

Also, in this seventeenth annual review of the Order, Commerce “continue[d] to find that 

the raw garlic purchased by both Golden Bird and Xinboda is not farmgate in nature.” Issues & 

Dec. Mem. at 15. In reaching this conclusion, the Department made the following observations:

Department officials conducted verification of Golden Bird during the instant 

review and, as part of verification, visited some of Golden Bird’s producer’s 

suppliers. It is clear from verification that while the suppliers may be farmers, the 

garlic they are selling to Golden Bird’s producer has already been cleaned,

transported, and kept in cold storage. 

Likewise, while we did not verify Xinboda, we note that the fact that 

Xinboda was able to purchase garlic throughout the POR indicates that the garlic 

its producer purchases has been stored and therefore reflects a level of 

trade/processing beyond the farmgate. . . . As such, Xinboda’s raw garlic has also 

been subject to some level of preparation (i.e., bagging to be placed in storage) as

well as transportation or labor to place the garlic in cold storage[]. Accordingly, 

the Department continues to find that the raw garlic purchased by both Golden 

Bird and Xinboda is not farmgate in nature.

Issues & Dec. Mem. at 14–15 (emphasis added). Based on these findings and consistent with its 

findings in the two prior reviews, here, Commerce continued to find that Xinboda’s and Golden 

Bird’s garlic bulb inputs were not obtained at the farm gate. Its use of the FAO price, which it

determined “is closer to a farmgate price,” in this review was therefore inconsistent with its use 

of wholesale prices to value the garlic bulb inputs in the prior reviews, seems to be at odds with 

its level of trade findings in this review, and, thus, requires at least some explanation. Issues & 

Dec. Mem. at 15.

In the Final Results, Commerce also discussed contemporaneity and addressed the noncontemporaneity of the FAO data, which is from calendar year 2009. Acknowledging that the 

FAO data was not contemporaneous to the POR, Commerce noted that the FAO data was close 

in time to the POR and argued that, although “the markets may have changed, there [was] no

evidence indicating that the 2009 price, indexed to the POR, [was] any less indicative of the 

price of garlic in Ukraine as a result of market development in the intervening time period.” 
Court No. 13-00236 Page 19

Issues & Dec. Mem. at 16. The Department also stated that it had “placed information on the 

record in the Preliminary Results [that] provided a method of inflating non-contemporaneous 

prices” and that “no party ha[d] disputed [the] information.” Issues & Dec. Mem. at 16. Put 

another way, Commerce found that the earlier FAO data was relatively close in time to the POR,

that there was no record evidence that the market for garlic had gone through a substantial 

change that would have dramatically altered the price, and that, because none of the parties 

raised any questions concerning its method of inflating non-contemporaneous prices, it was 

reasonable for the Department to use that method to index the FAO data for inflation. 

Commerce’s findings as to both level of trade and contemporaneity were not 

unreasonable. First, as has been noted, Commerce determined that respondents’ garlic bulb 

inputs were not purchased at farmgate prices. Rather, mandatory respondents paid prices at a 

more advanced level of trade. See Issues & Dec. Mem. at 14 (“While Xinboda and Golden Bird 

both contend that their garlic is obtained at the farmgate, . . . [i]t is clear from verification that 

while [Golden Bird’s] suppliers may be farmers, the garlic they are selling to Golden Bird’s 

producer has already been cleaned, transported, and kept in cold storage. Likewise, . . . the fact 

that Xinboda was able to purchase garlic throughout the POR indicates that [its] garlic . . . has 

been stored and therefore reflects a level of trade/processing beyond the farmgate.”).

It is also apparent that the FAO prices are likely close to farmgate prices, although there 

is at least some evidence indicating that they reflect a more advanced level of trade themselves.

That is, Commerce correctly noted that the FAO price used here “may reflect some other 

measures as well.” See Issues & Dec. Mem. at 14. While there is some indication that there 

would be a note accompanying FAO data that contained costs beyond the farm gate, whether the 

actual data contains this level of detail is unclear. See FAO Submission (“Most of the data 
Court No. 13-00236 Page 20

originated from country sources received through the FAO Questionnaire . . . on prices received 

by farmers. In some cases data was supplemented with official country publications and 

institutional databases. . . . In actual practice it has been noted that (a) data might not always 

refer to the same selling points depending on the prevailing institutional set-up in the countries, 

(b) different practices prevail in regard to sale of individual commodities, (c) methods of arriving 

at national averages also differ from one country to another, and (d) as many countries do not 

collect producer prices[ (i.e., prices determined at the farm gate or first-point-of-sale 

transactions)], unit values used in the compilation of national accounts aggregates has been taken 

as the nearest approximation.”). 

As to the level of trade of the FI prices, website printouts of several of the regional

markets on the record, as well as a declaration made by FI’s editor-in-chief, support the 

conclusion that they are wholesale prices. See Letter from Michael J. Coursey & John M. 

Herrmann, Kelley Drye & Warren LLP, to Secretary of Commerce at Attachments 1–6, PD 144–

148 at bar code 3091519-01–05 (Aug. 10, 2012), ECF Dkt. No. 28 (“Market Website Printouts”).

That is, the prices were for garlic that had already been, at minimum, sorted by bulb size, 

packaged in mesh bags, stored, and transported to the market. See FI Decl. ¶¶ 12, 18–20 (“There 

are no price surcharges for transportation, storage, or packaging costs. These expenses 

[(transportation, storage, and packaging costs)] are covered by the farmer selling at the market

and reflected in the wholesale price. . . . Before it is sold on the wholesale markets, fresh garlic is 

sorted by bulb size and is packed in mesh bags.”).

Importantly, however, the evidence found on these websites further indicates that the 

farmers selling their produce at each of these markets pay fees to the markets, including entrance 

fees and parking fees, that would likely be reflected in the prices paid by a buyer. See Market 
Court No. 13-00236 Page 21

Website Printouts. This conclusion is supported by a declaration on the record made by FI’s 

editor-in-chief, which states that “individuals or entities selling fresh garlic on the wholesale

markets monitored by [FI] are required to pay an entrance fee (or a trading platform fee)” and 

“[t]he amount of the fee depends on the class and size of the seller’s vehicle and, thus, is related 

to the volume of goods offered by the seller.” FI Decl. ¶ 15 (emphasis added). Indeed, in the 

Preliminary Results, where Commerce used the FI data, the FI prices were adjusted to take into 

account (remove) the costs represented by these fees.11 Thus, the FI prices likely included costs

not paid by mandatory respondents when they purchased their raw garlic bulbs,12 while the FAO 

data did not include costs that were included in respondents’ purchase prices.

11 In the Preliminary Results, Commerce adjusted the FI prices downward to reflect 

added costs:

Per the Department’s practice, we find that it is appropriate to make 

adjustments to the [FI] price to offset any possible mark-ups and/or selling fee 

that may not be reflective of the respondent’s experience. Petitioners have placed 

printouts from the websites of four of the eight markets on the record. These 

websites all indicated that selling through middlemen in these markets would 

result in a mark-up of 10 to 30 percent at the market. Additionally, these websites 

indicate that farmers are charged [a] parking fee. As noted above, it is not clear 

whether the [FI] prices include any taxes and/or duties. If the prices reflect any 

intermediary trading, there also exists a possibility that taxes and duties may have 

been added to the price. Therefore, to account for the possible mark-ups, fees, 

taxes[,] and duties that may be reflected in the [FI] price, the Department has 

determined that it will subtract the average of the possible mark-up as stated in the 

websites placed on the record by Petitioners. On this basis, the Department has 

removed 20 percent from the average POR price to account for any mark-ups, 

fees, etc. Finally, the Department subtracted 0.17 percent to account for the 

parking fee charged. 

Prelim. Surrogate Values Mem. at 6–7 (emphasis added) (footnotes omitted).

12 The court notes that the transactions involving the raw garlic bulbs actually 

occurred between mandatory respondents’ respective processors and local farmers and suppliers. 

See Intermediate Input Methodology Mem. at 2 (“In this review, [Golden Bird] and [Xinboda] 

have reported in their questionnaire responses that their respective processors purchased raw

garlic bulbs, the intermediate input, from local farmers and suppliers to produce the merchandise

 

(footnote continued)
Court No. 13-00236 Page 22

Although it departs from the nature of the surrogate prices used in the two prior 

administrative reviews, Commerce was not unreasonable in its conclusion that the FAO data was 

the best available information on the record to value the raw garlic respondents purchased.

Commerce found that “both the [FAO] price and the FI price data appear to be at a 

different level of trade and processing than respondents’ purchases and, without more 

information, it is not possible to determine whether one is more similar to respondent[s’] 

purchases of processed garlic bulb over the other.” Issues & Dec. Mem. at 15. That is, it is not 

clear at precisely what level of trade respondents’ raw garlic was purchased or the level of trade 

the FAO and FI data each represent. Put another way, on a level of trade spectrum with garlic 

purchased at farmgate prices (i.e., garlic that has undergone no processing) as one extreme and 

garlic purchased at wholesale prices (i.e., garlic that has undergone significant processing, 

storage, transportation, and payment of brokers’ fees) as the other, mandatory respondents’ garlic 

bulb purchases appear to be somewhere in the middle. In like manner, where the FAO and FI 

transaction prices fall on the spectrum is not precisely known.

It may be the case that the evidence would shade mandatory respondents’ purchases 

toward the wholesale end of the spectrum and that another fact-finder might have found the FI 

data to more closely reflect the level of trade at which respondents made their purchases. The 

level of trade reflected by the FI data is sufficiently vague, however, that, faced with the 

imperfect information on the record, Commerce’s choice of the FAO data was not unreasonable.

This is because the FAO data might well reflect prices for merchandise sold beyond the farm 

under review.”). In other words, the raw garlic bulb inputs were acquired by respondents’ 

processors and processed at their plants prior to being transferred to Xinboda and Golden Bird. 

 
Court No. 13-00236 Page 23

gate and the FI data appears to contain costs greater than those contained in the prices paid by 

mandatory respondents. 

The court also agrees with the Department’s contemporaneity conclusions and finds that,

under the circumstances, indexing the FAO price to the POR was reasonable. This is because the 

FAO data was from calendar year 2009, which is relatively close in time to the POR (November 

1, 2010 through October 31, 2011), no record evidence indicated that the market for garlic had 

substantially changed since 2009, and no party objected to Commerce’s method of indexing the 

price for inflation. 

More importantly, with respect to the Department’s ultimate conclusions, however, 

plaintiffs’ arguments ignore the other factors that Commerce typically considers when choosing 

the best available information to value factors of production and that Commerce considered 

those other factors in choosing the FAO price. That is, were it in fact the case that all of the 

factors Commerce considers when choosing a source for a surrogate price were equal, 

contemporaneous data at a closer level of trade would have been preferred. Here, however, all 

other factors were not equal, as plaintiffs suggest, particularly with regard to the broad market 

average and tax exclusivity factors. Although the level of trade and contemporaneity of the FAO 

data may not be perfect, the broad market average factor compels its use in this case because it 

represents all Ukrainian garlic production, while the FI data covers a very small sample of the

market. Moreover, as Commerce found, while there was evidence indicating that the FAO price 

was tax exclusive, the tax exclusivity of the FI data was unclear.

Plaintiffs’ arguments seem to invite the court to find that level of trade considerations are 

necessarily more important than other factors considered by Commerce in making a best 

available information on the record determination. The record in this case, however, 
Court No. 13-00236 Page 24

demonstrates that the factors must be considered together. Thus, while, if based solely on the

level of trade and contemporaneity factors, Commerce might reasonably have concluded that 

they favored the use of the FI data, that the FAO data base was so much larger than that of the FI 

data directs the result determined by Commerce. In other words, while specificity as to the level 

of trade and contemporaneity may be equivocal or even favor the FI data, the broad market 

average factor (coupled with tax exclusivity) argues so strongly in favor of the FAO data that the 

Department cannot be said to have erred by preferring it as the source of the surrogate value for 

raw garlic. Therefore, when proper weight is given to each of the factors, it is apparent that the 

FAO data is the best available information. 

Thus, because Commerce’s selection of the surrogate value for raw garlic bulb inputs is 

supported by substantial evidence, it is sustained. 

CONCLUSION

Based on the foregoing, it is hereby

ORDERED that the Department of Commerce’s Final Results are sustained. Judgment 

will be entered accordingly. 

Dated: July 16, 2015

New York, New York

/s/ Richard K. Eaton

Richard K. Eaton