Court Opinion

ID: 9495239
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:57:49.646489+00
Date Added: 2024-06-11T17:56:54.028097
License: Public Domain

GAJARSA, Circuit Judge,
dissenting.
I respectfully dissent. The decision of the United States Department of Commerce (“Commerce”) is not in accordance with law. I would therefore reverse the decision of the Court of International Trade (“CIT”), which affirmed Commerce’s decision. In affirming the CIT’s judgment, the panel majority holds that Commerce was authorized to impose adverse facts against Ta Chen because Ta Chen failed to furnish Commerce with the United States sales data of another company, one of its former distributors, Sun Stainless, Inc. (“Sun”). When Commerce specifically requested that Ta Chen provide Sun’s sales data, on November 9, 1999, Sun had been sold to a foreign corporation, and had ceased conducting business in the United States. See Ta Chen Stainless Steel Pipe, Inc. v. United States, No. 97-08-01344, slip op. 00-107, 2000 WL 1225799, at *1 (CIT Aug. 25, 2000) (“Ta Chen II”). According to the majority, Ta Chen “bore the risk” of this outcome because Ta Chen failed to obtain and preserve Sun’s resale data before Commerce ever requested it. Ante at 1336. The majority reaches this determination despite the fact that the pertinent statutes authorize Commerce to impose an adverse inference only after an importer fails to comply to the best of its ability with a request for information, 19 U.S.C. § 1677e(b) (2000), and only after Commerce has provided the importer “with an opportunity to remedy or explain the defi*1341ciency,” 19 U.S.C. § 1677m(d) (2000). The majority concludes that Commerce may penalize importers for failure to engage in divination. I disagree with this conclusion and the reasoning from which it materializes.
Section 1677e(b) authorizes Commerce to assess an importer’s response to a request for information. In response to a request by Commerce, importers must use their best efforts to provide the requested information. Commerce may impose an adverse inference only if an importer fails to respond with best efforts, 19 U.S.C. § 1677e(b) (2000), and fails to remedy or explain the deficiency, 19 U.S.C. § 1677m(d). Neither statute authorizes Commerce to impose an adverse inference on the grounds that an importer failed to predict a future request and take affirmative steps to obtain information before Commerce requested it. But this is precisely what Commerce did — impermissi-bly — to Ta Chen. See FAG Italia S.pA. v. United States, 291 F.8d 806, 816 (Fed.Cir. 2002) (holding that the absence of a statutory prohibition cannot serve as a source of Commerce’s authority in antidumping cases).
A careful review of the sequence of events demonstrates that Commerce exceeded the scope of its statutory authority by imposing adverse facts against Ta Chen. In 1992, domestic stainless steel pipe producers (“the petitioners”) filed an antidumping petition with Commerce. The petitioners alleged that certain welded stainless steel pipe from Taiwan was being “dumped,” or sold to United States customers at less than fair value. Commerce investigated. It determined that welded stainless steel pipe from Taiwan was being sold at less than fair value, and issued an antidumping order. Certain Welded Stainless Steel Pipe from Taiwan, 57 Fed. Reg. 62,300 (Dep’t Commerce Dec. 30, 1992) (amended final determination and antidumping duty order). Commerce initiated three administrative reviews covering three separate periods: June 1992 to November 1993 (“the first review period”), December 1993 to November 1994 (“the second review period”), and December 1994 to November 1995 (“the third review period”).
In December 1995, when Commerce published notice of the opportunity to request an administrative review for the dumping order for the third review period, Ta Chen requested a review. See Anti-dumping or Countervailing Duty Order, Finding, or Suspended Investigation, 60 Fed.Reg. 62,070, 62,071 (Dep’t Commerce Dec. 4, 1995). The third administrative review period, extending from December 1994 to November 1995, is at issue in this appeal. Ta Chen made no sales to Sun during this period. In fact, Ta Chen made no sales to Sun after August 1994; however, certain of Ta Chen’s sales to Sun were included in the third review period because Ta Chen shipped merchandise to Sun in the United States during that time frame. Ta Chen Stainless Steel Pipe, Ltd. v. United States, 97-08-01344, slip op. 97-117, 1999 WL 1001194, at *2 n. 3 (Ct. Int’l Trade Oct. 28,1999) (“Ta Chen I ”).
In 1994, in proceedings pertaining to the first administrative review, the petitioners represented to Commerce that Ta Chen and Sun were potentially affiliated. Ta Chen II, at *3. Affiliation is significant because, although dumping margins are ordinarily calculated with respect to the difference in price between what a foreign exporter charges in its home market and the price it charges in the United States, § 1677(33) of Title 19 of the United States Code includes certain affiliates in the statutory definition of “exporter.” The price at which such affiliates resell the merchandise in the United States constitutes the constructive export price, and is used to *1342calculate the exporter’s dumping margin. See 19 U.S.C. § 1677a(a) — (b) (2000). Thus, if an exporter such as Ta Chen sells a product to an affiliate at an inflated price, the exporter will be held accountable for dumping if the affiliate charges less-than-fair-value upon resale.
For the first two review periods, the petitioners alleged affiliation. Ta Chen denied affiliation, and Commerce neither questioned Ta Chen regarding its affiliation with Sun nor requested Sun’s resale data. During those first two review periods, Ta Chen owned no equity in Sun. Under Commerce’s then-existing interpretation of the statute applicable at that time, a finding that a party was sufficiently affiliated with an exporter to warrant use of that party’s sales price as the constructive export price required equity ownership. Consequently, (although Commerce later changed its position) under Commerce’s interpretation of the relevant statute during the first two review periods, Ta Chen and Sun were not affiliated. See Ta Chen Stainless Steel Pipe, Ltd., v. United States, No. 99-07-00446, slip op. 01-143, 2001 WL 1574603, at *2-3 (CIT Dec. 10, 2001) (“Ta Chen TV”) (explaining that Commerce previously interpreted 19 U.S.C. § 1677(13) (1988) to require equity ownership for an affiliate relationship, and holding that Commerce was free to change its interpretation subject to the requirements that it explain the reason for its change in position and that its new position must be consistent with the statute); see also Ta Chen Stainless Steel Pipe, Ltd. v. United States, 99-07-00446, slip op. 01-101, 2001 WL 915254, at *5-6 (CIT Aug. 14, 2001) (holding that although the previous' statute permits examination of factors other than equity ownership, Commerce must explain the reason for its departure from past practice, which required equity ownership for affiliation, and remanding to provide Commerce an opportunity to explain the reason for its departure).
During the third period of review, the statute regarding affiliation changed. Congress enacted' the Uruguay Round Agreements Act (URAA), which became effective on January 1, 1995, one month into the third review period. The URAA broadened the circumstances under which the dumping margins of exporters would be determined based upon the constructive export price of their United States affiliates. See 19 U.S.C. § 1677(33)(g) (2000) (providing that control is sufficient to render parties “affiliated,” and that “a person shall be considered to control another person if the person is legally or operationally in a position to exercise restraint or direction over the other person”). The scope of § 1677(33)(g) appears broader than -the pre-URAA statute because control may exist without equity ownership; however, Commerce had interpreted the pre-URAA statute to require equity ownership even though that statutory language was also susceptible to a broader definition. Thus, when the URAA initially became effective one month into the third review period, Customs’ interpretation of the meaning of “affiliated parties” had not yet been promulgated and it was as of yet unclear how the agency would interpret the new statutory standard.
■ Two and a half years after the URAA became effective, Commerce issued a final rule codifying the agency’s interpretation of “control,” sufficient to render an entity an “affiliated” under the URAA. See 19 C.F.R. § 351.102 (2000). Under Commerce’s interpretation, as codified in § 351.102, “corporate or family groupings; franchise or joint venture agreements; debt financing; and close supplier relationships,” will not provide a basis for finding affiliation based on operational control, “unless the relationship has the potential to impact decisions concerning the production, pricing or cost of the subject merchandise.” Id. This regulation did not be*1343come effective until July 1, 1997, almost two years after the end of the third review period. See Antidumping Duties; Countervailing Duties, 62 Fed.Reg. 27,296, 27,-417 (Dep’t Commerce May 19, 1997) (final rules). For administrative reviews such as the third review period at issue, which were initiated after the URAA became effective but prior to the effective date of the rules, Commerce stated that the regulation would “serve as a restatement” of its interpretation of the requirements of the URAA.
Commerce determined that during the third review period, Sun met its new interpretation of an “affiliated person” under the URAA. But it was not until January 10, 1997, that Commerce informed Ta Chen of this determination. In fact, Commerce failed to inform Ta Chen that it considered Sun an affiliate during the third period of review, or that it might consider Sun an affiliate during the third period of review, until after Ta Chen’s affiliation with Sun unquestionably ended.
On February 13, 1996, Commerce first issued Ta Chen a general questionnaire regarding affiliated importers. This questionnaire quoted the newly enacted statutory definition of “affiliated persons.” It did not, however, offer additional guidance regarding Commerce’s interpretation of the scope of this statutory standard, nor did the questionnaire refer to Sun. Ta Chen’s response listed other companies as affiliates, but did not include Sun.
On October 22, 1996, Commerce first requested information about Sun, in particular. Commerce issued a supplemental questionnaire requesting that Ta Chen “[p]lease explain in detail your relationship, past and present, with all entities known as [Sun].” The panel majority states that in response to this questionnaire, Ta Chen “did not provide any information regarding sales data.” Ante at 1333. This statement implies that Commerce’s supplemental questionnaire requested Sun’s sales data. That implication is clearly erroneous. The supplemental questionnaire made no such request. Indeed, as the Court of International Trade noted, Commerce “never specifically requested this [sales] information,” prior to its first attempt to impose adverse facts against Ta Chen. Ta Chen I at *12.
Moreover, after receiving Ta Chen’s response to the first supplemental questionnaire, Commerce apparently issued a second supplemental questionnaire on December 24, 1996. Id. at *12. The CIT found that in this second supplemental questionnaire, Commerce “specifically told Ta Chen ... that it had not yet decided how to classify Ta Chen’s U.S. sales.” Id. Commerce failed to ask specifically for Sun’s U.S. sales data in this questionnaire, despite issuing preliminary results two weeks later, on January 10, 1997, in which Commerce determined that Sun was an affiliate.
Commerce issued both supplemental questionnaires after the deadline for Ta Chen to submit unsolicited factual information. Id. Commerce failed, in either questionnaire, specifically to request Sun’s sales data. In fact, the CIT stated that Commerce “appears to have tried to avoid giving Ta Chen a belated chance to amend.” Id. Because Commerce failed to notify Ta Chen that the agency considered Sun an affiliate, the CIT reversed Commerce’s imposition of adverse facts and remanded the matter to give Ta Chen “an opportunity to remedy or explain the deficiency” pursuant to 19 U.S.C. § 1677m(d). Ta Chen I at *12-14 (stating that “Commerce has an obligation to make the questions affected by affiliation issues clear, in light of its own recognition that affiliation is a complex concept”).
Thus, Commerce did not make clear to Ta Chen from the outset of the third ad*1344ministrative review that it considered Sun an affiliate, or even a potential affiliate, under the new statutory and regulatory definition. Although I agree with the panel majority and the CIT that substantial evidence supports Commerce’s determination that Sun and Ta Chen were affiliated within the meaning of § 1677(33)(G) for the early part of the third review period, I do not agree that any statutory or regulatory authority authorizes the imposition of an adverse inference against Ta Chen for Ta Chen’s failure to predict that Commerce would reach this determination. See Ta Chen I at *14 (“In this case Ta Chen had a good basis to argue that it did not control Sun and it made that argument to Commerce.”). For the first seven months of the third review period, from December 1994 to July 1995, a former minority shareholder of Ta Chen, Frank McClane, owned Sun. During this time, Ta Chen had custody of Sun’s signature stamp, and access to its accounts receivable and payable, inventory, and pricing information.. Ta Chen also participated in negotiations of Sun’s sales of steel pipe during this time. From this, a reasonable fact-finder could infer that Ta Chen exercised influence sufficient to constitute “control” over Sun’s U.S. pricing.
Had Commerce requested Sun’s sales data from Ta Chen during this period of affiliation, Ta Chen would have had to produce it or suffer the imposition of an adverse inference. . It is unreasonable, however, to assume that if an affiliation exists at one time, it necessarily continues indefinitely. Cf. AK Steel Corp. v. United States, 192 F.3d 1367, 1376 (Fed.Cir.1999) (reversing imposition of countervailing duties because although Korean government exercised the requisite control to benefit its steel industry at one time, “Commerce has not pointed to evidence from which it is reasonable to infer that the government’s control continued into the period of investigation”). In this case, the affiliation ended. It ended before Commerce ever requested Sun’s resale data from Ta Chen.
On July 3, 1995, with almost six months remaining in the third period of review, McClane sold a controlling interest in Sun to a foreign corporation, Picol International (“Picol”). Ta Chen II at *1. Commerce did not publish a notice of initiation for review in this case until February 1, 1996, almost seven months after Sun was sold and its affiliation with Ta Chen was severed. See Ta Chen I at *12. After Commerce issued the initial questionnaire and the two supplemental questionnaires described above — none of which specifically requested Sun’s sales information despite the new but potentially inapplicable statutory definition of affiliates — Commerce issued preliminary results for the third review period in which it determined that Sun and Ta Chen were affiliated. Commerce then determined that Ta Chen had failed to act to the best of its ability to provide information on Sun’s U.S. sales, and imposed the highest dumping margin from facts otherwise available for those sales.
Ta Chen appealed. On appeal, the CIT affirmed the finding of affiliation. Ta Chen I at *11 (“The court finds that Commerce’s determination that Ta Chen controlled Sun is supported by substantial evidence.”). The court remanded, however, because it found that Commerce erred in imposing adverse facts without providing adequate notice that Commerce would classify Ta Chen’s sales to Sun as constructive export price sales. Id. at 12. According to the court, Commerce failed to satisfy its “statutory obligation to provide respondents with a chance to remedy deficient submissions,” id. (citing 19 U.S.C. § 1677m(d) (1994)), because Commerce never specifically requested Sun’s resale data, and, by the time Ta Chen learned *1345that Commerce would classify Ta Chen and Sun as affiliates, the time to submit unsolicited information had passed, id. The court explained that:
[I]f a respondent reasonably believes it is not affiliated with its reseller ... then it has a reason not to submit information on the subject reseller’s U.S. sales until Commerce tells the respondent that it wants the information on the particular reseller or until Commerce’s questions are clear enough that the respondent knows what it should submit. In this situation where a new statute was not fully explained and Commerce suspected that it would make a finding of affiliation between the importer and the U.S. reseller, it should have placed the respondent on notice, specifically requested information on that reseller’s U.S. sales, and requested any other information necessary to the [constructive export price] calculation. If Commerce wishes to place the full burden of error of an affiliation assessment on the respondent, at a minimum it must make that clear, otherwise this is simply another instance of error which respondents must have an opportunity to correct under 19 U.S.C. § 1677m(d).
Id. at *14.
On remand, Commerce specifically requested Sun’s resale data for the first time. This request occurred on November 9, 1999, more than four years after the former minority shareholder in Ta Chen had sold Sun to Picol. Ta Chen forwarded Commerce’s request for Sun’s sales data to Picol, but Picol declined to provide Sun’s sales data. In a letter dated November 25, 1999, Picol’s attorney stated that “Sun was closed on September 30, 1998” and no longer conducted business in the United States. The letter stated that because answering Commerce requests is burdensome and costly, his client would not cooperate with Commerce’s inquiry. Ta Chen requested that Picol reconsider answering Commerce’s request, and submitted a response to Commerce explaining that Sun had undergone a subsequent buyout after McClane sold it in 1995 and requesting an extension “in the hope that we hear back a more positive response from Sun.” Commerce granted Ta Chen two extensions of time. On December 8, 1999, the day after Commerce granted the second extension, Ta Chen forwarded Commerce a second letter from Picol’s attorney. That letter states: “My client advises me today that he will not respond to the [Commerce] questionnaire for the same reason as I indicated to you in my prior letter dated November 25, 1999.” At that point, Ta Chen informed Commerce that “further pressing on this matter appears to be futile.”
Commerce concluded that Ta Chen had failed to comply to the best of its ability in providing the requested Sun sales data because Ta Chen failed to provide the data itself. Commerce did not inform Ta Chen of any insufficiency in the efforts Ta Chen made to comply with the request after receiving it. Rather, Commerce concluded that Ta Chen should have “taken steps to obtain and preserve the relevant records” before Commerce requested them. Certain Welded Stainless Steel Pipe from Taiwan, Final Results of Redetermination Pursuant to Court Remand, No. 97-08-01344, slip op. 99-117 at 4 (Dep’t Commerce Feb. 25, 2000) (“Remand Results ”). Commerce concluded that Ta Chen should have taken these affirmative steps in anticipation of a potential future request because “Ta Chen had notice that its relationship with Sun in particular, raised a question with the Department as to affiliation at least as early as October 1996.” Id. at 9.
Commerce’s determination was contrary to law. By October 1996 — the date on which the agency reasoned that Ta Chen had notice that it should preserve Sun’s *1346sales information — Sun had already been sold to Picol. The record is devoid of evidence to support an inference that Sun and Ta Chen were affiliated after that sale. Nor does it contain evidence suggesting that Ta Chen had any access to Sun’s resale data in October 1996, or in November 1999 when Commerce first specifically requested it. Nevertheless, on remand, Commerce imposed adverse facts against Ta Chen in calculating the applicable dumping margin.
Ta Chen appealed to the CIT for the second time. This time, the court affirmed Commerce’s determination in its entirety. See generally Ta Chen II. In the prior appeal, the CIT held that Commerce acted contrary to law by failing to notify Ta Chen that it was accountable for producing Sun’s resale data. This time, however, the court held that Ta Chen could be held accountable for failing to produce the data because “[a]s early as July 1994, Ta Chen knew its relationship with Sun was at issue because the petitioners had called it to the Department’s attention in the first administrative review.” Ta Chen II at *3. Therefore, the CIT affirmed Commerce’s determination that Ta Chen failed to act to the best of its ability in responding to Commerce’s information request, not because of any insufficiency in Ta Chen’s response to the request once it issued, but because “in order to comply to the best of its ability, Ta Chen should have preserved Sun’s information in the event that its sales were classified as [constructive export price sales].” Id. (emphasis added).
The CIT reached this conclusion despite a complete lack of evidence suggesting that Ta Chen ever possessed that information to begin with. Commerce appears to have recognized this; it held that Ta Chen’s efforts were deficient because Ta Chen failed to “obtain and preserve” Sun’s sales data. Remand Results at 4 (emphasis added). Thus, the CIT affirmed Commerce’s determination only by diverging from the crucial facts as Commerce found them, in violation of SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947).
Next, despite concluding in the previous appeal that Commerce erred in failing to follow its statutory mandate to provide Ta Chen with the chance to remedy deficiencies in its response, this time the CIT determined that Commerce was under no obligation to afford Ta Chen a chance to remedy the deficiency. Ta Chen II at *5. The court held that Commerce need not provide Ta Chen with the chance to remedy the deficiency in its response. This is so, it concluded, because § 1677m(d) is inapplicable in remand proceedings “where time is of the essence,” and because the chance to remedy errors would have made no difference; part of Ta Chen’s deficiency was that it “could have done more to preserve the information on Sun’s U.S. sales when it clearly had control of the information.” Id.
The CIT erred in affirming Commerce’s determination, as does the panel majority. Commerce’s imposition of adverse facts was contrary to law. The CIT reached a contrary conclusion by impermissibly reading the applicable statutes. It issued a decision that contravenes both the law and the reasoning by which the court was guided in Ta Chen I. Consequently, on appeal, this court should have reversed and remanded. But rather than analyzing the pertinent statutory language to determine whether Commerce acted within the bounds of its statutory authority — which it did not — the panel majority skips the technicalities of statutory interpretation, and affirms on the basis that “it is reasonable in this case for Commerce to expect Ta Chen to preserve its records in the event that Commerce itself would request *1347them.... ” Ante at 1336. Grave error infects this determination at every turn.
The majority begins by noting that Commerce imposed adverse facts against Ta Chen because “Ta Chen was affiliated with Sun during the period of review and then subsequently failed to act to the best of its ability to provide information on Sun’s U.S. sales.” Ante at 1336 (emphasis added). But as we shall see, the record contains no evidence of any failure on the part of Ta Chen subsequent to the period of review. It certainly contains no evidence of any failure on the part of Ta Chen subsequent to Commerce’s request for Sun’s resale data. To the contrary, the majority’s conclusion necessarily rests on the assumption that Ta Chen should have obtained and preserved Sun’s resale data before Sun was sold. The sale to Picol occurred on July 3, 1995, six months before the end of the period of review, more than one year before Commerce determined that Ta Chen was on notice that it might request Sun’s resale data, and more than four years before any evidence of record reflects a specific request by Commerce for this data. There is no statutory basis for imposing on Ta Chen a duty to obtain and preserve records prior to a request for information by Commerce.
Next, the majority determines that “Ta Chen bore the burden of creating an accurate record.” Ante at 1336. In support of this proposition, the majority cites Zenith Electronics Corp. v. United States, 988 F.2d 1573, 1583 (Fed.Cir.1993), in which this court stated that the burden of production rests on “the party in possession of the necessary information.” (Emphasis added.). But no evidence of record demonstrates that Ta Chen ever possessed Sun’s U.S. resale data. Although Ta Chen could have been held accountable for obtaining that information from Sun during the period of affiliation, it is that period and that period alone during which the notion of constructive possession could reasonably apply. The law simply does not require companies to succeed in obtaining information from non-affiliates, over which, by statutory definition, they lack control. For non-affiliates, exporters’ best efforts may fall short of obtaining cooperation.
Commerce therefore erred in concluding that “the requested data relates to a period when Ta Chen and Sun were readily sharing the subject information.... In this situation, it is reasonable to expect Ta Chen to work with Sun’s new owners to obtain the new information.” Remand Results, at 11. To the contrary, although the evidence of affiliation is sufficient to demonstrate that Ta Chen could have obtained Sun’s sales records during at least part of the third review period, the record is devoid of evidence suggesting that Ta Chen actually did so. Unless Commerce can demonstrate that Ta Chen was affiliated with Sun after Commerce requested Sun’s sales information, then Commerce is free to expect Ta Chen to attempt to obtain the information from Sun’s new owners, but Commerce is not free to impose adverse facts against Ta Chen if Sun’s new owners refuse to cooperate. Rather, Commerce must identify any deficiencies in Ta Chen’s efforts to persuade Sun to cooperate. The agency must also afford Ta Chen the chance to remedy such deficiencies before it may impose adverse facts available.
Finally, despite noting that “a respondent to a Commerce inquiry only has an obligation to produce data requested by Commerce,” ante at 1336 (citing § 1677e(b)), the panel majority concludes that “it is reasonable in this case for Commerce to expect Ta Chen to preserve its records in the event that Commerce itself would request them, which it actually did in October 1996,” id. (emphasis added). But it is Sun’s records, not Ta Chen’s, that Ta Chen is being faulted for not producing. *1348I disagree that it is reasonable for Commerce to expect Ta Chen to obtain and preserve Sun’s records. For six months during 1995 Ta Chen and Sun arguably met a newly adopted statutory definition of affiliation. Commerce did not clarify its interpretation of this admittedly complex statutory provision until issuing final rules in 1997. Although the petitioners had alleged that Ta Chen and Sun were affiliated during earlier review periods, Commerce failed to question Ta Chen about the potential affiliation. In fact, in the second supplemental questionnaire issued by Commerce two weeks before it initially determined that Sun’s resale price would constitute Ta Chen’s constructive export price, Commerce informed Ta Chen that the agency had not yet determined how it would classify Ta Chen’s sales. As between Ta Chen and Commerce, it is reasonable to place the burden on Commerce to inform Ta Chen that its interpretation of impending legislation may lead it to request information that it had previously not requested.
Reason does not, it seems to me, support the majority’s decision to affirm Commerce’s imposition of the requirement that Ta Chen actively obtain and preserve records in response to a request that Commerce might (or might not) someday make. This is particularly so where, in response to the petitioners’ allegations in 1994 and the enactment of the URAA, Commerce easily could have made clear that it might consider Sun an affiliate, and that Ta Chen should therefore take steps to obtain and preserve Sun’s sales data.
More importantly, even were such an expectation reasonable, there is simply no statutory authority allowing Commerce to assume adverse facts against an importer for failing to predict what information Commerce might someday request. See FAG Italia, S.pA., 291 F.3d at 816-19 (holding the absence of a statutory prohibition cannot be a source of agency authority and that Commerce lacks authority to conduct two and four-year duty absorption inquiries for transition orders due to the absence of statutory authorization). The statute on which Commerce relied, § 1677e(b), requires importers to respond to requests by Commerce to the best of their abilities. Commerce may impose adverse facts only where a party fails to “cooperate by not acting to the best of its ability to comply with a request for information” from Commerce. 19 U.S.C. § 1677e(b) (2000) (emphasis added). The statute does not require importers to take active measures to acquire or preserve information prior to such a request. Nor does the statute authorize Commerce to impose adverse facts based upon the consequences of legitimate business transactions that occur prior to a request. In this case, until Commerce notified Ta Chen that it might deem Sun an affiliate and requested that Ta Chen obtain and provide Sun’s sales data, Ta Chen had no obligation to obtain and preserve that information.
Moreover, the rationale for the statute is “to provide respondents with an incentive to cooperate.” F.LLI DeCecco Di Filippo Fara S. Martino S.p.A v. United States, 216 F.3d 1027, 1032 (Fed.Cir.2000). This purpose is not served by allowing Commerce to impose adverse facts available based on an exporter’s failure to preserve information that has become unavailable by the time Commerce requests it. One cannot fail to comply with a non-existent request. The existence of § 1677m(d), which affords respondents a chance to remedy deficiencies in their responses, also confirms the interpretation that the duty to respond with best efforts to a request made pursuant to § 1677e(b) arises in response to requests by Commerce, not prior to them.
*1349Finally, Commerce violated § 1677m(d) by failing to notify Ta Chen of the nature of the deficiency in its response to the request for Sun’s resale data. Although Ta Chen responded to Commerce’s request by informing Commerce of Ta Chen’s attempts to obtain Sun’s records from Picol, Commerce concluded that Ta Chen had failed to use its best efforts in response to Commerce’s request for Sun’s resale data, and therefore determined that it would impose adverse facts against Ta Chen without promptly informing Ta Chen “of the nature of the deficiency,” and without providing Ta Chen with “an opportunity to remedy or explain the deficiency.” 19 U.S.C. § 1677m(d) (2000).
Contrary to the Court of Internal Trade’s conclusion, nothing in the text of § 1677m(d) precludes it from applying in the context of remand proceedings. Remand occurs when some aspect of an anti-dumping determination by Commerce has been inadequate. It would be strange indeed if Congress had intended to authorize the CIT to remand a determination for failure to comply with § 1677m(d), only to have Commerce fail to comply again, but escape the consequences of so doing because the failure occurred on remand. Had Congress meant to exclude application of § 1677m(d) from remand proceedings, it simply would have said so.
In fact, the panel majority does not even address this aspect of the CIT’s determination. I interpret the opinion, therefore, as holding § 1677m(d) inapplicable on the facts of this case, not in remand proceedings generally. The conclusion that Commerce satisfied the requirements of § 1677m(d) because Ta Chen provided no “response to a request” but rather engaged in a “complete failure to respond” is belied by the majority’s recognition that Ta Chen responded to Commerce’s request by, among other things, informing Commerce that further efforts to obtain the information from Picol would be futile.
The evidence of record indicates that Ta Chen attempted to comply with Commerce’s request to provide Sun’s resale data once Commerce made that request. Commerce is not authorized to hold Ta Chen accountable for failing to predict and take affirmative steps to execute that request, which came over three years after the alleged affiliation between Ta Chen and Sun ended. Commerce is authorized to require Ta Chen to respond to the best of its present ability with a request. Commerce lacks authority to deem a response deficient based on the notion that Ta Chen should have affirmatively acted to “obtain and preserve” another company’s records before Commerce requested them.
In short, the Court of International Trade got it right in Ta Chen I:
If Commerce wishes to place the full burden of error of an affiliation assessment on the respondent, at a minimum it must make that clear, otherwise this is simply another instance of error which respondents must have an opportunity to correct under 19 U.S.C. § 1677m(d).
Ta Chen I, at *14. If Commerce wishes to require all importers to take active steps to obtain sales records of any U.S. distributors who may later be deemed affiliates, it must promulgate a regulation pursuant to statutory authority. Having failed to do so, Commerce may not automatically hold Ta Chen accountable for failing to obtain records of another company with which it was formerly affiliated. It must assess Ta Chen’s efforts in light of the relationship in existence once Commerce made its request.
The imposition of adverse facts and the resulting dumping margin should be vacated and remanded. On remand, Commerce should be instructed to comply with § 1677m(d) by explaining to Ta Chen what *1350additional efforts Commerce expects Ta Chen to take to obtain its former affiliate’s records. The panel majority’s decision instead to affirm gives Commerce carte blanche to require importers to gaze into their crystal balls, and to affirmatively obtain records that Commerce may never request, or may request years later under a subsequent change in the law. Imposing this requirement is both unreasonable and, more importantly, contrary to law. I therefore respectfully dissent.