Court Opinion

ID: 817710
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:57:15.127898+00
Date Added: 2024-06-11T15:26:37.828398
License: Public Domain

Slip Op. 10-129

           UNITED STATES COURT OF INTERNATIONAL TRADE

______________________________
                              :
SHANDONG CHENHE INTERNATIONAL :
TRADING CO., LTD.,            :
                              :
               Plaintiff,     :   Before: Richard K. Eaton, Judge
                              :
     v.                       :   Court No. 08-00373
                              :
UNITED STATES,                :   Public Version
                              :
               Defendant,     :
                              :
     and                      :
                              :
FRESH GARLIC PRODUCERS        :
ASSOCIATION, CHRISTOPHER      :
RANCH LLC, THE GARLIC COMPANY,:
VALLEY GARLIC, and VESSEY AND :
COMPANY, INC.,                :
                              :
               Def.-Ints.     :
______________________________:

                             OPINION

[Commerce’s final determination rescinding plaintiff’s new
shipper review is sustained.]
                                   Dated: November 22, 2010

     Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
(Bruce M. Mitchell, Ned H. Marshak, Elaine F. Wang, and Andrew T.
Schultz), for plaintiff.

     Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Reginald T. Blades, Jr., Assistant Director, Civil
Division, United States Department of Justice (Richard P.
Schroeder); Office of the Chief Counsel for Import
Administration, United States Department of Commerce (Evangeline
D. Keenan), of counsel, for defendant.

     Kelley Drye & Warren, LLP (Michael J. Coursey and John M.
Herrmann), for defendant-intervenors.

     Eaton, Judge: This matter is before the court on the motion
Court No. 08-00373                                              Page 2

for judgment on the agency record of plaintiff Shandong Chenhe

International Trading Co., Ltd.    (“plaintiff” or “Chenhe”).     See

Br. In Supp. of Pl.’s Rule 56.2 Mot. For J. Upon the Agency R.

(“Pl.’s Br.”).   Defendant the United States, and defendant-

intervenors the Fresh Garlic Producers Association, Christopher

Ranch LLC, The Garlic Company, Valley Garlic, and Vessey and

Company, Inc. (collectively, “defendant-intervenors”) oppose the

motion.   See Def.’s Mem. In Opp’n to Pl.’s Rule 56.2 Mot. for J.

Upon the Agency R. (“Def.’s Mem.”); Def-Ints.’ Br. In Resp. To

Pl.’s Mot. For J. On the Agency R. (“Def.-Ints.’ Br.”).

     By its motion, plaintiff challenges the final results of the

United States Department of Commerce’s (“Commerce” or the

“Department”) twelfth new shipper review of the antidumping duty

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

for the period of review (“POR”) beginning on November 1, 2006

and ending on April 30, 2007.     See Fresh Garlic from the PRC, 73

Fed. Reg. 56,550 (Dep’t of Commerce Sept. 29, 2008) (final

results and rescission, in part, of twelfth new shipper review)

and the accompanying Issues and Decision Memorandum(Dep’t of

Commerce Sept. 19, 2008) (“Issues & Dec. Mem.”) (collectively,

“Final Results”).    Specifically, plaintiff insists that Commerce

erred in rejecting its lone U.S. sale as not being bona fide.

Jurisdiction lies pursuant to 28 U.S.C. § 1581(c) (2006) and 19

U.S.C. § 1516a(a)(2)(B)(iii).
Court No. 08-00373                                            Page 3

     For the reasons set forth below, the court denies

plaintiff’s motion and sustains Commerce’s Final Results.

                            BACKGROUND

     On May 17, 2007, plaintiff asked Commerce to initiate a new

shipper review of its sale of fresh garlic.   Fresh Garlic from

the PRC, 72 Fed. Reg. 38,057, 38,057-58 (Dep’t of Commerce July

12, 2007) (initiation of antidumping duty new shipper reviews)

(“Initiation”).   The purpose of a new shipper review is to

determine whether an exporter or producer, whose sales were not

examined in an investigation, is (1) entitled to its own

antidumping duty rate under the order resulting from the

investigation, and (2) if so, to calculate that rate.    To

calculate a rate, Commerce must determine the normal value,1

export price,2 and the antidumping duty margin3 for each entry of

     1
          Normal value is defined as:

          the price at which the foreign like product
          is first sold (or, in the absence of a sale,
          offered for sale) for consumption in the
          exporting country, in the usual commercial
          quantities and in the ordinary course of
          trade and, to the extent practicable, at the
          same level of trade as the export price or
          constructed export price . . . .

19 U.S.C. § 1677b(a)(1)(B)(i).
     2
           The “export price” is generally defined as “the price
at which the subject merchandise is first sold . . . by the
producer or exporter of the subject merchandise outside of the
United States to an unaffiliated purchaser in the United States
Court No. 08-00373                                            Page 4

the subject merchandise.   19 U.S.C. § 1675(a)(2)(A).

     Commerce initiated the review on July 12, 2007.    Initiation,

72 Fed. Reg. at 38,060.    On May 1, 2008, the Department published

its preliminary results.   Fresh Garlic from the PRC, 73 Fed. Reg.

24,042, 24,042 (Dep’t of Commerce May 1, 2008) (preliminary

results of the 12th new shipper reviews) (“Preliminary Results”).

In the Preliminary Results, Commerce found that Chenhe had

imported the subject merchandise into the United States in a bona

fide sale at a non-dumped price.    Id. at 24,047.   Commerce then

preliminarily calculated a dumping margin of zero for the

company.   Id.

     After these results were published, defendant-intervenors

filed a case brief alleging that Chenhe’s purported sale was, in

fact, not bona fide.   The brief claimed that Commerce had made

errors in its analysis and asserted that if Commerce had taken

specific evidence into consideration it would have not concluded,

in the Preliminary Results, that plaintiff was entitled to a

separate rate.   Conf. R. (“CR”) Doc. No. 102 (“Def.-Int. Case

or to an unaffiliated purchaser for exportation to the United
States . . . .” 19 U.S.C. § 1677a(a).
     3
          An antidumping duty margin is “the amount by which the
normal price exceeds the export price or constructed export price
of the subject merchandise.” 19 U.S.C. § 1677(35)(A). If the
price of an item in the home market (normal value) is higher than
the price for the same item in the United States (export price),
then the dumping margin comparison produces a positive number
that indicates dumping has occurred.
Court No. 08-00373                                              Page 5

Brief”).

      In its Final Results, the Department took defendant-

intervenors’ arguments into account and determined that Chenhe’s

sale was not bona fide.    Commerce then rescinded the new shipper

review as to the company.    Final Results, 73 Fed. Reg. at 56,551.

                          STANDARD OF REVIEW

      The court must uphold a final determination by the

Department in an antidumping proceeding unless it is “unsupported

by substantial evidence on the record, or otherwise not in

accordance with law . . . .”    19 U.S.C. § 1516a(b)(1)(B)(i).

                              DISCUSSION

I.   Applicable Law

      Under 19 U.S.C. § 1675(a)(2)(B), upon request, Commerce

shall conduct administrative reviews “for new exporters and

producers” and “establish . . . individual weighted average

dumping margin[s]” for them.    19 U.S.C. § 1675(a)(2)(B)(i).

Thus, the statute provides new exporters or producers the

opportunity to establish that they are entitled to an individual

rate under an existing order.    It is Commerce’s practice during

these new shipper reviews to determine whether the new exporters

and producers have conducted bona fide or commercially reasonable

transactions.   See 19 C.F.R. § 351.214(b)(2) (2009); Hebei New
Court No. 08-00373                                           Page 6

Donghua Amino Acid, Co., Ltd. v. United States, 29 CIT 603, 608,

374 F. Supp. 2d 1333, 1338 (2005) (“Hebei”).   In conducting this

test, Commerce’s goal is to determine “whether the sale(s) under

review are indicative of future commercial behavior.”    Id. at

613, 374 F. Supp. 2d at 1342.

      This Court has, on a number of occasions, upheld Commerce’s

use of this analysis.   See, e.g., Hebei, 29 CIT at 608-09, 374 F.

Supp. 2d at 1338; Tianjin Tiancheng Pharmaceutical Co., Ltd., v.

United States, 29 CIT 256, 366 F. Supp. 2d 1246 (2005)

(“Tianjin”); Windmill International Pte., Ltd., v. United States,

26 CIT 221, 193 F. Supp. 2d 1303 (2002) (“Windmill”).    As laid

out in Hebei, Commerce normally employs a totality of the

circumstances test to determine whether the transaction is

“commercially reasonable” or “atypical of normal business

practices.”   29 CIT at 610, 374 F. Supp. 2d at 1339 (quoting

Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313).   Commerce

looks at, among other factors, “the price and quantity” of the

goods sold.   Id.

II.   Commerce’s Determination

      Chenhe’s request for an individual dumping margin was based

on its sole entry during the POR.   Initiation, 72 Fed. Reg. at

38,057.   In the Final Results, Commerce found that “[b]ased on

the totality of the circumstances . . . , the Department has
Court No. 08-00373                                             Page 7

determined that Chenhe’s single POR sale is not a bona fide

transaction, and subsequently has rescinded the new shipper

review . . . .”    Issues & Dec. Mem. at Comm. 1.

     In making this determination, Commerce stated that its

practice, when applying its totality of the circumstances test,

is “to examine both the quantity and value of other POR entries

of subject merchandise from the PRC as well as a respondent’s

sales to third countries, when available, in evaluating the price

and quantity of a single POR sale for the purposes of the bona

fides analysis.”     Issues & Dec. Mem. at Comm. 1.   The Department

further explained that its determination that Chenhe’s sale was

not bona fide was “based on a combination of factors including:

[the entry’s] high price, its low quantity, and the fact that it

was atypical of Chenhe’s U.S. customer’s normal commercial

practices.”   Issues & Dec. Mem. at Comm. 1.

     With respect to quantity, Commerce found that Chenhe’s sole

sale of fresh garlic was: (1) smaller than the average sale

amount for all Chinese exporters shipping to the United States

during the POR; (2) markedly less than Chenhe’s average sales to

third countries during the POR; and (3) smaller than the average

amount imported by Chenhe’s U.S. customer during the POR.4

     4
          Commerce found that the quantity of Chenhe’s sale was
[[         ]] kilograms, and out of the [[     ]] entries from
China during the POR, it was the [[                    ]] entry.
CR Doc. No. 109 (“BPI Memo”) 2. The average quantity of all
                                                   (continued...)
Court No. 08-00373                                            Page 8

Issues & Dec. Mem. at Comm. 1 (“[T]he Department finds that the

quantity of Chenhe’s sale . . . fell substantially below the

average U.S. import quantities [from China] . . . .   [T]he

department notes that when the quantity of Chenhe’s U.S. sales is

compared to the average quantity of its third-country sales, the

quantity is atypical. . . .   Furthermore, . . . the quantity . .

. of Chenhe’s sale [was] atypical of the other purchases of

subject garlic made by Chenhe’s U.S. customer during the POR.”).

As a result of these findings, Commerce concluded that the small

size of Chenhe’s sale supported a finding that the entry was

unrepresentative of sales during the POR and thus not indicative

of future sales by the company.   Issues & Dec. Mem. at Comm. 1.

     With regard to sales price, the Department further found

that the relatively high sales price of Chenhe’s entry was an

even greater indication that the sale was atypical of what

Chenhe’s future behavior would be:

          [T]he Department compared the per-unit price
          for Chenhe’s single POR sale with the

     4
      (...continued)
entries during the POR was [[        ]] kilograms and Chenhe’s
entry was [[                  ]] than the average quantity for
all entries. BPI Mem. 2 Commerce additionally found that
Chenhe’s average shipment to third countries was [[          ]]
kilograms, which was [[                    ]] than the quantities
of Chenhe’s single U.S. sale. BPI Mem. 2 Chenhe’s U.S.
purchaser made [[    ]] other purchases during the POR, with an
average quantity of [[        ]] kilograms, thus the quantity
Chenhe’s entry was [[                  ]] than the average
quantity of the U.S. purchaser’s other transactions. BPI Mem. 2
Court No. 08-00373                                              Page 9

            [Average Unit Value (“AUV”)] for all entries
            under HTSUS 0703.20.0010:5 FRESH WHOLE GARLIC
            BULBS, and found that the price of Chenhe’s
            single POR sale was unusually high when
            compared to the weighted AUV of all other
            entries under this HTSUS subcategory. . . .
            The Department further note[d] that Chenhe’s
            POR sale subject to this review was also
            atypical when compared to the AUV of Chenhe’s
            third country sales. . . .

Issues & Dec. Mem. at Comm. 1.

       In other words, Commerce found that the price paid for

Chenhe’s garlic was abnormally high6 when compared to: (1) other

Chinese entries during the POR; and (2) the price of the

company’s sales to third-country purchasers.   In addition, the

Department concluded that the price paid by Chenhe’s U.S.

customer was markedly higher than the customer paid to other

Chinese exporters and producers during the POR.7

       5
          All parties agree that in the preliminary results,
Commerce incorrectly used HTSUS category 0703.20.0020: Fresh
Peeled Garlic to evaluate Chenhe’s price and quantity data.
Issues & Dec. Mem. at Comm. 1. In the Final Results, Chenhe’s
data was analyzed using HTSUS category 0703.20.0010: Fresh Whole
Garlic Bulbs. Id. In doing so, Commerce re-evaluated Chenhe’s
submitted data using the correct HTSUS category and re-analyzed
Chenhe’s third-country sales and additional data put on the
record.
       6
            The price for Chenhe’s single entry was [[          ]].
The   average unit value for all of the entries from China during
the   POR was [[          ]]. Thus, Chenhe’s price was [[
 ]]   than the average unit value for all entries. BPI Memo 2.
The   average unit value of Chenhe’s third country sales was [[
      ]]. BPI Mem. 2
       7
          The U.S. purchaser had [[    ]] purchases from [[    ]]
other exporters of the subject merchandise during the POR, the
                                                   (continued...)
Court No. 08-00373                                             Page 10

       Based on these findings, Commerce determined that

“[Chenhe’s] sale does not provide a reasonable or reliable basis

for calculating an antidumping duty margin.”      Issues & Dec. Mem.

at Comm. 1.       Therefore, since Chenhe had only one entry during

the POR, and that entry was determined, based on quantity and

price, to be non-bona fide, Commerce rescinded Chenhe’s new

shipper review and did not calculate a separate antidumping duty

for the company.       Id.

III.       Analysis

       The issue before the court is whether Commerce erred in its

decision to rescind the new shipper review based on its finding

that Chenhe’s sale was not bona fide.      For its part, Chenhe

maintains that, as a matter of law, the Department can reject its

sale only if it was “unrepresentative and extremely distortive,”

and that substantial evidence did not support such a finding.

Pl.’s Br. 12 (quoting Hebei, 29 CIT at 610, 374 F. Supp. 2d at

1339).      Commerce counters that both the low quantity of Chenhe’s

entry and its high price lead to a conclusion that the single

sale under review was not indicative of future commercial

behavior.      Issues & Dec. Mem. at Comm. 1.

       7
      (...continued)
average unit value of these entries was [[          ]]. Chenhe’s
sale price was thus [[           ]] than the average unit value
of other transactions made by the U.S purchaser. BPI Memo 2.
Court No. 08-00373                                           Page 11

        The bona fide analysis conducted in new shipper reviews has

been addressed by this Court on multiple occasions.    The case

that corresponds most closely to the facts before the court is

Hebei, which involved Commerce’s determination that a single

entry of glycine into the United States was not a bona fide sale.

Hebei, 29 CIT at 604, 374 F. Supp. 2d at 1334.    The Court in

Hebei upheld, as reasonable, Commerce’s use of the “totality of

circumstances” test to determine if a sale was bona fide, and

rejected the plaintiff’s call for “bright line rules” regarding

what constituted an acceptable transaction.     Id. at 610, 374 F.

Supp. 2d at 1339.

        In Hebei, the Department determined that the single entry at

issue could not provide the basis for making a new shipper

determination because “the pricing of the sale is artificially

high and otherwise commercially unreasonable, . . . the quantity

of the single shipment is extremely low in comparison with other

sales from the People's Republic of China” and “the importer has

not resold the merchandise and has otherwise not acted in a

commercially reasonable manner.”     Id. at 606, 374 F. Supp. 2d at

1336.    In reaching its holding, the Hebei Court found that the

quantity of the questioned sale was “extremely low” when compared

with: (1) sales of other Chinese exporters to U.S. purchasers;

and (2) the exporter’s own sales to other U.S. purchasers and to

purchasers in third countries.     Id. at 614-15, 374 F. Supp. 2d at
Court No. 08-00373                                           Page 12

1342-43.

     As to price, the Court found that Commerce had supported its

conclusion that the price was abnormally high by a comparison of

the sales price with: (1) the price of all similar (clearly not

aberrational) entries made from China; and (2) the price of all

similar entries from whatever source.   Id. at 611, 374 F. Supp.

2d at 1340 (“These price comparisons constitute substantial

evidence for Commerce’s decision that [Hebei’s] sales price was

‘substantially higher than any observed value.’”).

     Other cases have looked at similar factors when applying the

totality of circumstances test.   The Tianjin case also involved a

single shipment of glycine from the PRC to the United States.

Tianjin, 29 CIT at 256, 366 F. Supp. 2d at 1247.     In that case,

Commerce also rescinded the new shipper review, relying on its

finding that “the price at which the goods were sold was not

‘commercially reasonable.’”   Id. at 258, 366 F. Supp. 2d at 1248.

Commerce found the sales price to be atypical of both the market

as a whole and of plaintiff’s own sales prices.8   Id. at 261, 366

F. Supp. 2d at 1251 (“Accordingly, Commerce found that

Plaintiff’s price was out of line with both the benchmark of

other Chinese exporters’ sales of glycine to the United States,

     8
          In addition to the atypical price, the single entry at
issue in Tianjin was paid for nine months late, and there were
irregularities in the Customs papers related to the entry,
further supporting Commerce’s finding that the sale was not bona
fide. Tianjin, 29 CIT at 270, 366 F. Supp. 2d at 1259.
Court No. 08-00373                                           Page 13

and with Plaintiff’s own pricing practice as it applied to third-

country sales.”).    The Tianjin Court sustained Commerce’s finding

that in order to be bona fide, a transaction must be a “normal”

sale in the context of good business practice generally and “a

good future indicator of Plaintiff’s future sales in the market.”

Id. at 276, 366 F. Supp. 2d at 1263.

     Windmill involved a new shipper review for an exporter of

cut-to-length carbon steel plate from Romania.     Windmill, 26 CIT

at 221, 193 F. Supp. 2d at 1304-05.    In that case, Commerce

looked at a number of factors in making its determination,

including that the merchandise was shipped by air rather than by

sea and that the purchaser re-sold the merchandise at a loss.9

In addition, Commerce assigned great weight to its finding that

“[t]he quantity of the sale was atypical of that which Windmill

normally sells to the U.S. [purchaser]. . . .”     Id. at 225, 193

F. Supp. 2d at 1307 (citations omitted).

     The Windmill Court also found important Commerce’s finding

that “[s]ix months prior to and subsequent to the sale [at

issue], Windmill made sales [of different merchandise] to the

same U.S. purchaser that was substantially larger than the test

case quantity.”     Id. at 229, 193 F. Supp. 2d at 1311 (citations

     9
          In the proceedings before Commerce in Windmill, the
Department also concluded that “[t]here [was] no evidence that
any commercial factors that normally influence price negotiations
played any role in setting the price for this sale.” Windmill,
26 CIT at 231, 193 F. Supp. 2d at 1313 (citations omitted).
Court No. 08-00373                                           Page 14

omitted).   Thus, the Court upheld Commerce’s conclusion that the

transaction “was not commercially reasonable and was atypical of

the normal business practices between Windmill and the United

States purchaser.”   Id.

     Commerce’s determination that Chenhe’s sale was not bona

fide is sustained.   In reaching this holding, the court is aware

that the size of an entry does not necessarily control Commerce’s

analysis.   See Windmill, 26 CIT at 231, 193 F. Supp. 2d at 1313

(“[S]ingle sales, even those involving small quantities, are not

inherently commercially unreasonable and do not necessarily

involve selling practices atypical of the parties’ normal selling

practices.”) (citations omitted).   Nonetheless, the size of the

sale can raise questions as to whether the purchaser would buy

the merchandise in the future in the same quantity at the same

price.   See Tianjin, 29 CIT at 260, 366 F. Supp. 2d at 1250

(“[B]ecause the ultimate goal of the new shipper review is to

ensure that the U.S. price side of the antidumping calculation is

based on a realistic figure, any factor which indicates that the

sale under consideration is not likely to be typical of those

which the producer will make in the future is relevant.”).

     In addition, while plaintiff’s reliance on a single sale

need not be fatal, a single sale leaves little to review.      See

Tianjin, 29 CIT at 275, 366 F. Supp. 2d at 1263 (“In one-sale

reviews, there is, as a result of the seller’s choice to make
Court No. 08-00373                                           Page 15

only one shipment, little data from which to infer what the

shipper’s future selling practices would look like.    This leaves

the door wide to the possibility that the sale may not, in fact,

be typical, and that any resulting antidumping duty calculation

would be based on unreliable data.”).

       As to Chenhe’s legal argument that its shipment must be

found “extremely distortive” in order for it to be rejected, the

company seeks to set the bar too high.   The purpose of a new

shipper review is to determine if an exporter or producer is

entitled to a separate rate and to set that rate.     In order for

Commerce to set an accurate rate, it must have before it a

transaction from which it can reasonably determine a margin.

Thus, a single transaction need not be “extremely distortive” in

order to be found unsuitable.   Rather, to be used as a basis for

setting an individual rate, a sale must be typical of normal

business practices.    See Windmill, 26 CIT at 231, 193 F. Supp. 2d

at 1313.

       As to the evidence Commerce cites to justify its conclusion,

Chenhe does not dispute that its entry contained one of the

smallest quantities of goods of any entry from China during the

POR.   Nor does it dispute that the size of the shipment was small

when compared to Chenhe’s sales to other countries and other

purchases by the U.S. purchaser.   Thus, it was reasonable for

Commerce to conclude the small quantity of Chenhe’s sale would
Court No. 08-00373                                            Page 16

not be indicative of typical future transactions.

     As to the price paid for the shipment of merchandise,

Commerce found it to be “unusually high when compared to the

[average unit value] of all entries” during the POR.    Issues &

Dec. Mem. at Comm. 1.   Commerce also found the price to be

significantly higher than Chenhe’s sales to third countries and

higher than its buyer’s other purchases.   Id.   Plaintiff contends

that Commerce erred in its price analysis in comparing the price

of the entry with the AUVs of the other Chinese entries during

the POR.   Chenhe insists that Commerce should have instead

compared the price of the entry to other individual entries.

Pl.’s Br. 23 (“The bona fides of the Chenhe sale is based on the

Department’s determination as to whether the price is

commercially reasonable—a determination which requires a

comparison of that price to other prices which fall within the

norm, regardless of their relationship to the average”).

     If Commerce had done so, plaintiff argues, it would have

found that the price of other entries that were not found to be

atypical had prices closer to Chenhe’s price than to the AUV.

Pl.’s Br. 23.   Put another way, plaintiff urges the court to find

that Commerce should have compared the price of its single entry

to other entries during the POR with prices more in line with the

price of Chenhe’s entry.   Thus, plaintiff observes that a number

of entries during the POR were relatively close to Chenhe’s
Court No. 08-00373                                            Page 17

price, although no entry had a price as high as Chenhe’s.10

Pl.’s Reply Br. 10.

     Chenhe’s argument is unconvincing.    Commerce’s use of AUV

data has been upheld by this Court in the past because “the

larger the sample, the less risk run that the sample chosen is

extreme or unusual simply by chance.”     Tianjin, 29 CIT at 267,

366 F. Supp. 2d at 1256.   In other words, using the average of a

large sample is a better indicator of normal activity than a

comparison of a smaller number of selected sales.    Here, Chenhe’s

price was dramatically higher than the AUV for other Chinese

entries during the POR, as well as higher than the AUV for

Chenhe’s sales to third countries during the POR and its buyer’s

other purchases.   While the sale price may well have been close

to the high end of all Chinese sales during the POR, this

evidence does little to detract from the conclusion that Chenhe’s

sale was atypical of normal business practices.

     Finally, plaintiff argues that the price of its entry

included a premium to compensate Chenhe for agreeing to pay any

antidumping duties.11   As such, Chenhe maintains that the

     10
          Plaintiff cites to prices of [[
                           ]] to support this argument.      Pl.’s
Reply Br. 10.
     11
          Chenhe’s transaction was the only transaction of all of
the transactions during the POR that was under [Delivered Duty
Paid (“DDP”)] sales terms; all other transactions, including the
other transactions by the U.S. purchaser were made under [FOB]
                                                   (continued...)
Court No. 08-00373                                            Page 18

purchase price should be reduced to account for this premium.12

Pl.’s Br. 20.   Chenhe’s U.S. customer, however, would not respond

to repeated questionnaires from Commerce and inquiries from

Chenhe’s counsel concerning the terms of the sale.   As a result,

Commerce could not substantiate the company’s claim of an

agreement relating to the antidumping duties.   Ultimately,

Commerce found that there was “no evidence on the record of this

review supporting Chenhe’s claim that its U.S. customer agreed to

pay a higher premium in exchange for Chenhe’s agreement to act as

the [importer of record] and be responsible for the [antidumping

duty] liability.”    Issues & Dec. Mem. at Comm. 1 n.14.

     In disputing this conclusion, plaintiff insists that the

terms of the sale themselves “constitute the best evidence that

the buyer and seller understood the significance of the

[antidumping duty] liability when they negotiated the material

terms of this transaction” and that “[t]here was simply no reason

. . . for Chenhe . . . to submit any additional documentation to

support the self-evident fact that . . . the price will be

influenced by a decision as to which party assumes responsibility

for this liability.”   Pl.’s Br. 20.   In other words, Chenhe

     11
      (...continued)
sales terms. BPI Memo 3.
     12
          It should be noted that Chenhe’s putative agreement to
reimburse the importer for any antidumping duties imposed on the
imported merchandise might run afoul of the “absorption”
provisions found in 19 C.F.R. § 351.402(f).
Court No. 08-00373                                             Page 19

claims that the high price paid for the merchandise is

substantial evidence that it included an amount to compensate

plaintiff for assuming the burden of the duties.

     The court finds that Commerce’s decision not to credit

plaintiff’s argument that the purchase price should be reduced to

compensate for antidumping duties is supported by substantial

evidence.   During the course of the review, Chenhe’s U.S.

purchaser refused to respond to Commerce’s questionnaires

regarding the negotiations leading up to the sale, and as to the

terms of sale themselves.     See CR Doc. Nos. 52, 63 (responses

from U.S. customer to Commerce and Counsel for Chenhe regarding

additional questionnaires).    Nor would the purchaser answer

questions posed by Chenhe’s counsel.    CR Doc. Nos. 52, 63.    As a

result, Commerce had no information before it concerning: (1)

whether the sales price was increased to account for any

antidumping duties to be paid by the seller; or (2) the amount by

which the sales price was increased.    Thus, there is nothing on

the record to support plaintiff’s terms of sale contention.

     Further, the high price paid does not constitute evidence

that there was an agreement to compensate plaintiff for assuming

the antidumping duties, particularly because plaintiff has not

made any representation as to the amount that plaintiff was

supposed to be compensated.    At oral argument, counsel for

plaintiff was unable to offer the court any additional
Court No. 08-00373                                           Page 20

explanation of plaintiff’s claim, nor a methodology by which to

calculate the size of the claimed premium.    Tr. of Conf. Or. Arg.

at 47.    As such, the court finds reasonable Commerce’s decision

not to reduce the entry’s price in order to take the claimed

terms of sale into account.

        Ultimately, the court must hold that substantial evidence

supports Commerce’s finding that Chenhe’s sale was not bona fide

because it was not “a good future indicator of Plaintiff’s future

sales in the market.”     Tianjin, 29 CIT at 276, 366 F. Supp. 2d

at 1263.    The purpose of a new shipper review is to determine an

individual antidumping margin for an importer that did not

receive a separate rate under an antidumping duty order.    In

order to calculate an accurate antidumping duty margin for a new

shipper, Commerce must examine sales data that is indicative of

the respondent’s normal business practices so as to judge its

future commercial behavior.     Hebei, 29 CIT at 613, 374 F. Supp.

2d at 1342.    If the evidence of the entry on the record is not

indicative of typical business practices, no accurate individual

rate can be set.    Accordingly, in this case, the low quantity and

high price for the single sale constitutes substantial evidence

that the transaction could not be used as a basis for a separate

rate.
Court No. 08-00373                                         Page 21

                             CONCLUSION

     Plaintiff’s motion for judgment on the agency record is

denied and Commerce’s decision to rescind the new shipper review

as to Chenhe is sustained.   Judgment shall be entered

accordingly.

                                           /s/ Richard K. Eaton
                                            Richard K. Eaton

Dated:    November 22, 2010
          New York, New York