Opinion ID: 210163
Heading Depth: 2
Heading Rank: 2

Heading: Significant Potential for Manipulation

Text: In order to determine whether a significant potential for the manipulation of price or production exists, the collapsing regulation provides that Commerce may look to three factors: (i) The level of common ownership; (ii) The extent to which managerial employees or board members of one firm sit on the board of directors of an affiliated firm; and (iii) Whether operations are intertwined, such as through the sharing of sales information, involvement in production and pricing decisions, the sharing of facilities or employees, or significant transactions between the affiliated producers. 19 C.F.R. § 351.401(f)(2). Complying with the regulation, Commerce based its determination on detailed factual findings on these factors. For example, Commerce found that all three companies had the same two directors, that those directors effectively controlled all three companies, that those directors and their relatives were the principal stockholders, and that the Viraj entities' operations were substantially intertwined since, for example, they all obtained their steel billets from VAL and used them to produce the same product. Preliminary Results at 866-67. Viraj did not deny, and in fact confirmed, these facts. The Court of International Trade did not discuss or analyze these findings in its opinion but rather apparently based its holding entirely on the belief, as discussed earlier, that the arm's-length lawful contracts between the subcontractor and each of the Viraj entities made it less likely that price or production manipulation would occur. Again, there is no indication that the arm's-length nature or anything else about the contracts would prevent or hinder price or production quantity manipulation among the three companies. There is no reason to believeand the Court of International Trade opinion cites nonethat the subcontractor would, or even could, decline to execute orders from the three companies that altered the quantities each sought, and certainly there is no reason to believe the subcontractor could affect the prices they set. Indeed, the detailed factual findings of Commerce on the potential for manipulation prong clearly demonstrate that Commerce's determination was supported by substantial evidence.