Court Opinion

ID: 9386150
Source: CourtListenerOpinion
Date Created: 2023-04-11 17:01:25.811243+00
Date Added: 2024-06-11T17:17:57.166625
License: Public Domain

Slip Op. 23-

                UNITED STATES COURT OF INTERNATIONAL TRADE

 RISEN ENERGY CO., LTD.,

        Plaintiff,

 JINGAO SOLAR CO., LTD., ET AL.,

        Consolidated Plaintiffs,
                                                  Before: Jane A. Restani, Judge
 SHANGHAI BYD CO., LTD., TRINA
 SOLAR CO., LTD., ET AL.,
                                                  Consol. Court No. 20-03912
        Intervenor Plaintiffs,

 v.

 UNITED STATES,

        Defendant.

                                    OPINION AND ORDER

[Commerce’s Remand Results in the Sixth Administrative Review of Commerce’s Countervailing
Duty order on crystalline silicon photovoltaic cells from the People’s Republic of China are
remanded for reconsideration consistent with this opinion.]

                                                                           Dated: April 11, 2023

Gregory S. Menegaz and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC,
argued for Plaintiffs. With them on the brief was James K. Horgan.

Sarah M. Wyss, Mowry & Grimson, PLLC, of Washington, DC, argued for Consolidated
Plaintiffs. With her on brief were Jeffrey S. Grimson, Bryant P. Cenko, Jill A. Cramer, Kristin H.
Mowry, Yixin (Cleo) Li.

Craig A. Lewis and Jonathan T. Stoel, Hogan Lovells US LLP, of Washington, DC, for Intervenor
Plaintiffs Shanghai BYD Co., Ltd.

Jonathan M. Freed, Kenneth N. Hammer, MacKensie R. Sugama, and Robert G. Gosselink, Trade
Pacific PLLC, of Washington, DC, for Intervenor Plaintiffs Trina Solar Co., Ltd.
Consol. Court No. 20-03912                                                                Page 2

Joshua E. Kurland, Commercial Litigation Branch, U.S. Department of Justice, of Washington,
DC, argued for Defendant. With him on the brief were Brian M. Boynton, Patricia M. McCarthy,
and Reginald T. Blades, Jr. Of counsel on the brief was Spencer Neff, Office of Chief Counsel for
Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

       Restani, Judge: Before the court are the remand results of the U.S. Department of

Commerce (“Commerce”) pursuant to the court’s order in Risen Energy Co. v. United States, 46

CIT __, __, 570 F. Supp. 3d 1369, 1382 (2022), in the Sixth Administrative Review of the

countervailing duty order on crystalline silicon photovoltaic cells, whether or not assembled into

modules (“solar cells”), from the People’s Republic of China, covering the period from January 1,

2017, to December 31, 2017. See Redetermination Pursuant to Court Remand Order, ECF Nos.

93–94 (“Remand Results”). Plaintiff Risen Energy Co., Ltd. (“Risen Energy”) and Consolidated

Plaintiff Jingao Solar Co, Ltd. (“JA Solar”) (collectively, “Plaintiffs”)1 challenge the Remand

Results as unsupported by substantial evidence or otherwise not in accordance with law.

                                       BACKGROUND

       While the court presumes familiarity with the facts as set out in Risen, the court briefly

summarizes the relevant record evidence for ease of reference. In March 2019, Commerce began

the Sixth Administrative Review of the countervailing duty order on solar cells from the People’s

Republic of China. Initiation of Antidumping and Countervailing Duty Administrative Reviews,

84 Fed. Reg. 9,297, 9303–04 (Dep’t Commerce Mar. 14, 2019). On November 5, 2019, the U.S.

International Trade Administration selected JA Solar and Risen Energy as mandatory respondents

(“Mandatory Respondents”) in this review. See Dep’t Commerce, Resp’t Selection Mem. at 1–2,

1
  Intervenor Plaintiffs Shanghai BYD Co., Ltd. (“Shanghai BYD”) and Trina Solar Co., Ltd.
(“Trina”) are non-examined parties who seek the benefits of whatever relief the court grants. See
Remand Results at 4; Trina Comments on Remand Results, ECF No. 99 (Nov. 7, 2022);
Shanghai BYD Comments on Remand Results, ECF No. 100 (Nov. 7, 2022) (“Shanghai BYD
Brief”).
Consol. Court No. 20-03912                                                               Page 3

P.R. 98 (Nov. 5, 2019).

       Commerce published its preliminary results on February 11, 2020, see Crystalline Silicon

Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People’s Republic of

China: Preliminary Results of Countervailing Duty Administrative Review and Rescission of

Review, in Part; 2017, 85 Fed. Reg. 7,727 (Dep’t Commerce Feb. 11, 2020), along with the

accompanying Preliminary Issues and Decision Memorandum, Decision Memorandum for the

Preliminary Results of the Countervailing Duty Order on Crystalline Silicon Photovoltaic Cells,

Whether or Not Assembled Into Modules, from the People’s Republic of China, C-570-980, POR

01/01/2017–12/31/2017 (Dep’t Commerce Jan. 31, 2020) (“PDM”).

       Commerce published its final determination on December 9, 2020. See Crystalline Silicon

Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People’s Republic of

China: Final Results of Countervailing Duty Administrative Review; 2017, 85 Fed. Reg. 79,163

(Dep’t Commerce Dec. 9, 2020); see also Issues and Decision Memorandum for Final Results of

the Administrative Review of the Countervailing Duty Order on Crystalline Silicon Photovoltaic

Cells, Whether or Not Assembled Into Modules, from the People’s Republic of China, C-570-980,

POR 01/01/2017-12/31/2017 (Dep’t Commerce Nov. 27, 2020) (“I&D Memo”).

       In Risen, the court upheld Commerce’s determination that Plaintiffs received regionally

specific electricity subsidies subject to countervailing duties. See 570 F. Supp. 3d at 1382. The

court remanded to Commerce to reconsider (1) the benchmark for land prices in China and (2) the

benchmark for determining the cost of ocean freight for subsidy calculations involving provisions

of raw materials for less than adequate remuneration. Id. at 1376, 1379. Additionally, the court

granted the United States’ (“Government”) request for remand on the Government of China’s

(“GOC”) Export Buyer’s Credit Program (“EBCP”) but instructed Commerce to attempt to verify
Consol. Court No. 20-03912                                                                  Page 4

or to explain the reason that the court “should not provide some form of equitable relief.” Id. at

1373.

        Following remand, Commerce recalculated (1) the land benchmark by averaging the prior

dataset with new data placed on the remand record and (2) the ocean freight benchmark by

adjusting the previous average to correct the overreliance on data related to United States to China

routes. See Remand Results at 1–2. Finally, Commerce attempted to verify nonuse of the EBCP

by the Mandatory Respondents, finding that JA Solar did not use the program but concluding that

Risen could not show nonuse. Remand Results at 1.

        The Remand Results do not adequately address all of the court’s concerns in Risen and

they are not supported by substantial evidence. Accordingly, the court once again remands with

further instructions.

                        JURISDICTION & STANDARD OF REVIEW

        The court’s jurisdiction continues pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C.

§ 1581(c).    The court sustains Commerce’s final redetermination results unless they are

“unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]”

19 U.S.C. § 1516a(a)(2)(B)(i). “The results of a redetermination pursuant to court remand are also

reviewed for compliance with the court’s remand order.” U.S. Steel Corp. v. United States, 41

CIT __. __, 219 F. Supp. 3d 1300, 1307 (2017) (internal quotations and citations omitted).

                                          DISCUSSION

  I.    Export Buyer’s Credit Program

        The GOC’s EBCP promotes exports by providing credit at preferential interest rates to

qualifying foreign purchasers of GOC goods. See Clearon Corp. v. United States, 43 CIT __, __,

359 F. Supp. 3d 1344, 1347 (2019). During the investigation, Risen reported that none of its
Consol. Court No. 20-03912                                                                  Page 5

customers used the EBCP during the period of review (“POR”) and confirmed that it had never

been involved in assisting customers in obtaining loans under the program; it also provided

certifications of nonuse from its U.S. customers attesting to this fact. See Risen Energy Section

III Questionnaire Response, at 23–24, Ex. 19, P.R. 144–162, C.R. 109–276 (Dec. 30, 2019); Risen

Unaffiliated Supplier II, Section III Questionnaire Response at 23, Ex. 15, P.R. 164, C.R. 277 (Jan.

6, 2020). JA Solar similarly reported that none of its affiliated or unaffiliated customers received

assistance under the EBCP and that it did not assist any customers in using the program. See

Questionnaire Response of JA Solar and Affiliates, at Volume 1, III 38–40, P.R. 132–138, C.R.

31–103 (Dec. 30, 2019). JA Solar provided customer declarations certifying nonuse of the EBCP.

Id. at Ex. 25.

        The GOC did not provide all of the initially requested information to Commerce, stating

that the questions were inapplicable because “the GOC believes that none of the respondents under

review applied for, used, or benefitted from the alleged program.” GOC Initial Questionnaire

Response at 126, P.R. 140–143, C.R. 104–108 (Dec. 30, 2019); see I&D Memo at 27. Consistent

with the certifications of the Mandatory Respondents, the GOC, by searching the China Ex-Im

Bank’s loan database, corroborated that Mandatory Respondents and their customers did not use

the EBCP. GOC Initial Questionnaire Response at 126–28.

        Following remand, Commerce explained that it was changing its practice relating to EBCP,

and, going forward, would issue supplemental questionnaires if a respondent provided complete

customer declarations of EBCP nonuse. Remand Results at 18–19. Commerce explained that it

would require respondents to provide customer financial records constituting “complete gap-filling

information.” Remand Results at 19. If the respondents could not provide complete gap-filling

information, Commerce would be “left only with the GOC’s non-cooperation,” and thus would
Consol. Court No. 20-03912                                                               Page 6

apply an adverse inference as to the available facts (“AFA”) based on that non-cooperation.

Remand Results at 19. Applying the new practice on remand, Commerce sent questionnaires to

JA Solar and Risen requesting information about loans, financing, and record keeping by U.S.

customers to determine if customers received EBCP assistance. Remand Results at 6. JA Solar

provided complete information for its sole importer, JA Solar USA, Inc. for Commerce to review

and verify nonuse. Remand Results at 6–7. Commerce verified that JA Solar USA received no

loans or financing connected with the GOC. Remand Results at 7; see also JA Solar Verification

Report Rem. P.R. 27, Rem. C.R. 24 (Aug. 31, 2022). Commerce removed the previously applied

EBCP subsidy rate from JA Solar’s total rate. Remand Results at 7.

       Commerce reached a different result with respect to Risen. Remand Results at 7–9. Risen

had 12 U.S. customers but provided Commerce’s requested information for only 6 of the

customers, which Risen estimated were responsible for roughly 95% of its POR sales. Remand

Results at 7. Risen’s other six customers either did not respond, had ceased operations since the

POR, or answered that they did not use the EBCP. Remand Results at 7–8. As a result, Commerce

found that Risen had failed to provide sufficient information to fill the evidentiary gap in the

record. Remand Results at 8–9. Commerce reasoned that verification based on only a portion of

customers would provide Risen with “an opportunity to evade Commerce’s scrutiny” by providing

responses only from customers who did not use the EBCP. Remand Results at 9. Ergo, Commerce

concluded that Risen failed to fill the gap created by GOC’s failure to cooperate, and thus used

AFA to determine that Risen benefited from the EBCP. Remand Results at 9. Although Risen

suggested that Commerce adjust the AFA rate to account for customers who did provide requested

information, Commerce declined because there was no “precedent for doing so” and it had “no

way of knowing the size of the subsidies received by customers.” Remand Results at 20.
Consol. Court No. 20-03912                                                                    Page 7

        Now, Risen objects to the Remand Results, arguing that the record contains sufficient

information to verify nonuse of the EBCP. Risen Comments on Remand Results, ECF Nos. 97–

98 (Nov. 7, 2022) (“Risen Br.”). Risen points to the fully cooperating customers, whose responses

showed that they did not benefit from the EBCP, and asserts that there is no record evidence to the

contrary. Risen Br. at 3. Risen contends that these 6 customers, representing roughly 95% of

Risen’s sales, are a sufficient sample to verify nonuse. Risen Br. at 4. Risen argues that, at worst,

Commerce should modify the rate to account for the fact that there is record evidence

demonstrating that roughly 95% of sales were not benefited by the EBCP. Risen Br. at 7–8.

        If “necessary information is not available on the record” or if a responding party “withholds

information” requested by Commerce, Commerce shall “use the facts otherwise available in

reaching the applicable determination[.]” 19 U.S.C § 1677e(a). Commerce may use AFA only

when information is missing from the record because a party “has failed 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).    The application of adverse facts that collaterally impact a cooperating party is

disfavored. Fine Furniture (Shanghai) Ltd. v. United States, 36 CIT 1206, 1212 n.10, 865 F. Supp.

2d 1254, 1262 n.10 (2012), aff’d, 748 F.3d 1365 (Fed. Cir. 2014). “When Commerce has access

to information on the record to fill in the gaps created by the lack of cooperation by the

government, as opposed to the exporter/producer, however, it is expected to consider such

evidence.” GPX Int’l Tire Corp. v. United States, 37 CIT 19, 58–59, 893 F. Supp. 2d 1296, 1332

(2013), aff’d, 780 F.3d 1136 (Fed. Cir. 2015); see also Guizhou Tyre Co., Ltd. v. United States,

42 CIT __, __, 348 F. Supp. 3d 1261, 1270 (2018) (“To apply AFA in circumstances where

relevant information exists elsewhere on the record — that is, solely to deter non-cooperation or

‘simply to punish’ — . . . that is a fate this court should sidestep.”) (citation omitted).
Consol. Court No. 20-03912                                                               Page 8

       Information submitted by parties is subject to verification by Commerce. 19 U.S.C. §

1677m(i)(1). Commerce need not consider unverifiable information, but Commerce must show

that such information is not reasonably verifiable before it applies AFA. See Changzhou Trina

Solar Energy Co., Ltd. v. United States, 42 CIT __, __, 352 F. Supp. 3d 1316, 1327 (2018) (citing

19 U.S.C. § 1677m(e)); Papierfabrik August Koehler SE v. United States, 843 F.3d 1373, 1382–

83 (Fed. Cir. 2016) (holding that if the requirements of § 1677m(e) are not met, Commerce need

not consider information submitted by an interested party).

       As Commerce makes plain, it is using AFA based on a gap in the record about the EBCP

that occurred when the GOC declined to provide all the information Commerce sought regarding

the program. Remand Results at 9. Although the GOC did not provide all of the information it

should have, another party, such as a mandatory respondent, may be in a position to provide the

information sought or to render that information irrelevant, so that no adverse inference need be

drawn. See Jiangsu Zhongji Lamination Materials Co. v. United States, 43 CIT __, __, 405 F.

Supp. 3d 1317, 1333 (2019); GPX Int’l Tire, 37 CIT at 58–59, 893 F. Supp. 2d at 1332. Here,

Risen has supplied information so that there is no relevant missing information about the EBCP.

Not only has Risen provided sworn declarations from each of its customers stating that they did

not use financing from the EBCP, see Risen Unaffiliated Supplier II, Section III Questionnaire

Response, at 23, Ex. 15, P.R. 164, C.R. 277 (Jan. 6, 2020), but, after remand, Risen supplied

financial, loan, and record information regarding 6 of its 12 customers, representing roughly 95%

of sales during the POR. See Risen EBC Questionnaire Response at 1–2, Rem. P.R. 12, Rem. C.R.

2–4 (July 8, 2022) (“Risen EBC Questionnaire Response”); see also Remand Results at 7–8.

Commerce’s refusal to verify the customer data and continued application of other facts available
Consol. Court No. 20-03912                                                                  Page 9

is not supported by substantial evidence on this record because the information necessary to the

determination, assuming it is verified, is not lacking.

       This case involves a specific agency record that drives the court’s conclusion. During the

review, and before remand, as other respondents had done in other cases, Risen provided

declarations from all of its nonaffiliated customers, which stated that they did not use the EBCP.

See Risen Unaffiliated Supplier II, Section III Questionnaire Response at 23, Ex. 15, P.R. 164,

C.R. 277 (Jan. 6, 2020). At the time, Commerce concluded that these declarations could not be

verified to show nonuse. See Remand Results at 5. During the proceedings at the court, however,

Commerce shifted its EBCP policy, instead choosing to send supplemental questionnaires

requesting extensive customer financial documents whenever a respondent provided the

declarations of nonuse. See Remand Results at 6, 18–19. After remand, years after the POR and

the sales at issue were made, Commerce required Risen to coordinate sensitive and voluminous

financial records from all of its nonaffiliated customers to show that it did not receive a benefit

from the EBCP. See Commerce’s Letters, “Export Buyer’s Credit Supplemental Questionnaire,”

at 3–4, Volume 1, Rem. P.R. 1–2 (July 7, 2022). Risen had to do this to attempt to avoid the

collateral impact of the GOC’s failure to cooperate, despite Risen’s cooperation at every step along

the way. That brings the court to this decision.

       Commerce has stated that it cannot verify that Risen did not benefit from the EBCP because

6 of Risen’s 12 customers did not provide sufficient financial information. See Remand Results

at 7–9. Of the missing six customers, three did not respond to Risen’s requests, one responded

that its loans “had nothing to do with the EBC program or Risen,” another that “it did not use any

financing,” and a final company that had ceased operating during the POR. See Risen EBC

Questionnaire Response at 2. But the parties agree that Risen provided financial information for
Consol. Court No. 20-03912                                                             Page 10

its other 6 customers, who collectively represented roughly 95% of Risen’s sales during the POR.

See Remand Results at 7; Risen Br. at 1.

       Commerce claims that it cannot verify nonuse based on these responses because Risen

could evade Commerce’s scrutiny by hiding EBCP usage in data from the noncooperating

companies. See Remand Results at 9. And, Commerce explains, because Risen did not provide

“complete gap-filling information,” Commerce declined to attempt to verify Risen’s supplied

information. See Remand Results at 18, 20. Commerce concluded that there is still a gap in

verifiable information caused by the GOC’s failure to supply full information about the EBCP.

See Remand Results at 19–20. Ultimately, the question before the court is whether Commerce’s

explanation is reasonable. Cooper (Kunshan) Tire Co., Ltd. v. United States, 45 CIT __, __, 539

F. Supp. 3d 1316, 1333 (2021); see also Shandong Huarong Gen. Corp. v. United States, 25 CIT

834, 837, 159 F. Supp. 2d 714, 718 (2001) (stating that the court should uphold the agency

determination as long as “its factual findings are reasonable and supported by the record as a

whole”) (citations omitted), aff’d sub nom. Shandong Huarong Gen. Grp. Corp. v. United States,

60 F. App’x 797 (Fed. Cir. 2003).

       Commerce cannot reasonably conclude that Risen did not supply information that rendered

the missing data from the GOC irrelevant and essentially eliminated any gap in the record. Risen

substantially complied with Commerce’s investigation efforts and provided near complete data for

Commerce to review even after the long passage of time. See Risen EBC Questionnaire Response

at 1. The missing financial data from roughly 5% of sales involved smaller importers who likely

did not have enough of an interest to justify sharing the sensitive financial information with
Consol. Court No. 20-03912                                                                  Page 11

Commerce years after the POR.2 Considering that the POR was five years ago, that Commerce

changed its policy, and that Risen complied to the best of its ability, the court concludes it is

unreasonable for Commerce to require perfection. All of the record evidence points to nonuse of

the program at issue. Commerce’s concern about potentially hiding the use of EBCP in the

nonresponding companies is not reasonable when considering the collateral impact of AFA on the

fully cooperating Risen, the age of this case, and the still-relevant initial complete set of nonuse

declarations, which has not been seriously undermined. Substantial evidence does not support

Commerce’s continued application of AFA to Risen’s detriment on this record. On remand,

Commerce should attempt to verify Risen’s submissions to the extent Commerce finds appropriate,

and if that is successful, it should either accept the pro rata adjustment sought by Risen or conclude

that the EBCP was not used at all.

    II.   Land Benchmark

          When remanding, the court questioned Commerce’s continual reliance on data from 2010

Coldwell Banker Richard Ellis Asian Marketview Report (“2010 CBRE Report”) for Thailand

land prices to calculate the tier-three benchmark for the value of land-use rights. Risen, 570 F.

Supp. 3d at 1375–76. Commerce indexed the 2010 Thai prices to the POR when calculating the

benchmark. I&D Memo at 51. The court expressed concerned as to why Commerce gave

controlling weight to geographic proximity in evaluating land data and why Commerce rejected

more contemporaneous data from other countries, such as Mexico and Brazil, or the supplemental

2
  Commerce based the subsidy rate for EBCP on another program in a past proceeding. See
PDM at 38–39. Because Commerce has not obtained evidence of the use of the program at hand,
it has established no actual rate for the EBCP. It seems consistent with the record evidence of
nonuse that the possibly small benefit involved has not motivated customers in the United States
to pursue financing through the GOC’s export import bank. Whatever the motivation or lack
therof, as indicated, there is no evidence that this program was used by the customers involved in
the sales at issue.
Consol. Court No. 20-03912                                                             Page 12

Nexus reports in favor of using index data from 2010. Risen, 570 F. Supp. 3d at 1375–76; Letter

on Behalf of JA Solar to Dep’t of Commerce re: Land Benchmark Submission, at Ex. 1, P.R. 192

(Feb. 18, 2020) (“Nexus Reports”).3

       After remand, Commerce placed Malaysian land values from the Malaysian Investment

Development Authority Cost of Doing Business Report on the record as well as additional

information on the comparability of Malaysia and Thailand to China. See Dept. Mem. Re.

Upcoming Draft Remand Results – The Provision of Land for Less Than Adequate Remuneration

– Malaysia: Costs of Doing Business, Rem. P.R. 16 (Aug. 8, 2022); see also Dept. Mem. Re.

Benchmark Analysis of the Government Provision of Land-Use Rights in China for Countervailing

Duty Purposes at 30, P.R. 203 (Jan. 31, 2020) (“Land Use Memo”); Dept. Mem. Re. “Upcoming

Draft Remand Results – Population Densities of Countries”, Rem. P.R. 17 (August 8, 2022)

(“Commerce Population Density Data”); Dept. Memo. re. Upcoming Draft Remand Results –

Level of Economic Development, Rem. P.R. 18 (August 8, 2022) (“Commerce Economic

Development Information”).

       Commerce considered the Commerce Population Density Data because it indicated that

Thailand and Malaysia had similar population densities to China’s. Remand Results at 11. China

had a population density of 140 persons per square kilometer (K2) while Malaysia had 99/K2 and

Thailand had 130/K2. See Commerce Population Density Data at 1, 6–7. Further, Commerce

considered that China, Malaysia, and Thailand were classified as “upper middle income” countries

by the World Bank. Remand Results at 11; Commerce Economic Development Information at 5–

3
  The parties are not pursuing arguments related to Brazil, Mexico, or the Nexus Reports.
Instead, the Mandatory Respondent seek use of Malaysian data without averaging it with the
Thai data. JA Solar Comments on Remand Results, ECF No. 96 (Nov. 7, 2022) (“JA Solar Br.”)
at 7–9; Risen Br. at 8–9. Accordingly, the court will not address these matters further.
Consol. Court No. 20-03912                                                               Page 13

7. Based on these factors, Commerce concluded that data from Thailand and Malaysia would best

approximate a benchmark for land in China. Remand Results at 11–13. Acknowledging, however,

the court’s concern that the Thailand data was stale, Commerce calculated a simple average of the

Malaysian and Thai datasets to construct the benchmark. Remand Results at 11.4

       JA Solar presented data that showed that the difference between Thailand’s and China’s

gross national income per capita (“GNI”) was almost twice that of the difference between

Malaysia’s and China’s GNI.        See JA Solar Rebuttal Comments on Level of Economic

Development at Ex. 1, Rem. P.R. 21 (Aug. 16, 2022). Commerce declined to adjust the benchmark

because Commerce does not “prioritize the closeness of per capita GNI in selecting a benchmark.”

Remand Results at 22. Once again at the court, Plaintiffs challenge the use of the 2010 CBRE

Report for Thailand data, now arguing that Commerce should rely solely on the contemporary

Malaysia dataset. JA Solar Br. at 7–9; Risen Br. at 8–9.

       Under 19 U.S.C. § 1677(5)(E)(iv), Commerce must set benchmarks that reflect “prevailing

market conditions.” The statute further defines prevailing market conditions as including “price,

quality, availability, marketability, transportation, and other conditions of purchase or sale.” 19

U.S.C. § 1677(5)(E)(iv).    19 C.F.R. § 351.511(a)(2) provides additional guidance on how

Commerce sets benchmarks, setting out three methodological tiers. 19 C.F.R. § 351.511(a)(2).

       A tier-three benchmark “measure[s] the adequacy of remuneration by assessing whether

the government price is consistent with market principles.” Id. § 351.511(a)(2)(iii). “If Commerce

determines that the government price is not consistent with market principles it will look to

4
 Commerce explained that although this was a tier-three benchmark, “its approach is consistent
with the methodology it employs for tier two, under which Commerce will average together
available prices when more than one are available.” Commerce’s Resp. to Comments, ECF No.
105 (Jan. 18, 2023); see 19 C.F.R. § 351.511(a)(2)(ii).
Consol. Court No. 20-03912                                                                Page 14

construct an external benchmark.” Risen Energy, 570 F. Supp. 3d at 1374. When Commerce has

multiple datasets available, it “will average such prices to the extent practicable, making due

allowance for factors affecting comparability.” 19 C.F.R. § 351.511(a)(2)(ii).

       Commerce, however, fails to provide sufficient reasons to continue relying on the stale

data from Thailand when it has the contemporary data from Malaysia. As Commerce explained,

it selected the Malaysian land values because Malaysia also had a comparable level of economic

development to China and was similarly grouped as an upper-middle income country with

Thailand. See Commerce’s Resp. to Objections, ECF No. 105 (Jan. 18, 2023) at 15–16; Remand

Results at 12; see also Commerce Economic Development Information. Although Commerce

decided to average the datasets together for the benchmark, Commerce offered no rationale for the

decision to utilize both data and conceded that “nowhere on remand did [it] pursue a comparison

between the two sources.” Commerce’s Response to Objections at 17. As long as both countries

satisfy basic comparability standards, Commerce does not have to decide whether Malaysia is

more, less or equally comparable to China as Thailand is. It has to decide if it has such defective

data that it should be rejected in favor of better data. The Malaysian data is contemporaneous

while the Thai data is outdated by seven years and requires inflationary adjustments. Commerce

fails to address the court’s concern regarding the staleness of the 2010 CBRE Report regarding

Thailand. Thus, Commerce did not comply with the court’s remand instructions. Because the

Malaysian data is useable and the Thai appears to be defective, at this late stage, Commerce must

provide a compelling reason for its continued use of the stale 2010 CBRE report or otherwise use

the Malaysian data only.
Consol. Court No. 20-03912                                                                 Page 15

III.   Ocean Freight

       In its original determination, Commerce calculated a tier-two benchmark for the price of

ocean freight for bringing solar glass, polysilicon, and aluminum extrusions to China from various

cities as a world market price, pursuant to 19 C.F.R. § 351.511(a)(2)(ii). I&D Memo at 55–56. In

order to calculate the benchmark, Commerce used a simple average of two submitted data sets,

one from Descartes and the other from Xeneta. I&D Memo at 55. The Xeneta data reflected prices

from “monthly ocean freight data for shipping a 20-foot standard container to Shanghai” from

various ports across the world including Barcelona, Busan, Singapore, Jakarta, Los Angeles,

Rotterdam, and Mumbai. JA Solar, Benchmark Submission at Ex. 7C, C.R. 284–96, P.R. 166–68

(Jan. 13, 2020). At the same time, the Descartes data consisted of freight rates from various

American cities, including Los Angeles, Portland, San Francisco, Seattle, Chicago, Murrieta, and

Atlanta, to Shanghai. Petitioner, Submission of Benchmark Information at Exs. 5–7, P.R. 170–75

(Jan. 13, 2020). Many of the shipments had the same “Tariff Code” and freight forwarder code,

and some of the data also stated that the container size was less than a container load. Id.

       In Risen, the court remanded the benchmark calculation to reconsider flaws in the

Descartes data raised by Plaintiffs. 570 F. Supp. 3d at 1379. The court was concerned whether

the potentially flawed Descartes data was necessary to arrive at a “world market price” when the

Xeneta data provided global routes compared to the Descartes data’s U.S.-focused routes. Id. The

court also considered that the Descartes data might be flawed because it appeared to be sourced

from limited samples based on the codes, was for less than a container load, and some of the routes

were from inland American cities, which could incur additional fees. Id. As a result, the court

remanded to Commerce to reconsider these flaws before determining if any use of the Descartes

data was appropriate. Id. Further, the court instructed Commerce that, if it used the Descartes
Consol. Court No. 20-03912                                                                 Page 16

data, it should average it only with the Xeneta’s United States to China routes data instead of using

it in a simple average with world-wide data to prevent data limited to U.S. routes from improperly

ballooning the benchmark. Id.

       On remand, Commerce excluded the double counting of inland freight by omitting that

data and averaged the Descartes route values with the Xeneta values for shipments from the United

States. Remand Results at 14. Regarding the other alleged flaws in Descartes data, Commerce

did not agree that they warranted excluding the dataset. Remand Results at 14–15. Commerce

stated that it did not believe that “a hypothetical importer would as a rule not buy less than a

container.” Remand Results at 15. Commerce also concluded that the record did not show that a

hypothetical importer would not use these shipments based on the tariff codes and freight

forwarder codes. Remand Results at 15. Commerce therefore continued to rely upon the Descartes

data in determining the benchmark, only with the modifications requested by the court. Remand

Results at 15.

       Plaintiffs challenge the Remand Results, arguing that Commerce did not adequately

address the flaws in the Descartes data. See JA Solar Br. at 9–10; Risen Br. at 9–10; Shanghai

BYD Br. at 7–8. Plaintiffs assert that Commerce failed to consider the tariff codes and freight

forwarder codes. JA Solar Br. at 9; Risen Br. at 9. Plaintiffs suggest that the codes indicate that

the Descartes data is derived from limited route samples because each shared the same codes. JA

Solar Br. at 9; Risen Br. at 9. JA Solar contends that Commerce failed to explain what the

Descartes data added that the Xeneta data did not already include in the benchmark calculation.

JA Solar Br. at 10.     Plaintiffs agree, however, that Commerce complied with the remand

instructions when omitting the inland routes from the Descartes dataset. See JA Solar Br. at 9–10;

Risen Br. at 9–10; Shanghai BYD Br. at 7–8.
Consol. Court No. 20-03912                                                             Page 17

       For a tier-two benchmark, Commerce compares “the government price to a world market

price where it is reasonable to conclude that such price would be available to purchasers in the

country in question.” 19 C.F.R. § 351.511(a)(2)(ii). When there is more than one dataset

representing the world market price, then Commerce “will average such prices to the extent

practicable, making due allowance for factors affecting comparability.” Id. “This means that

Commerce must at least consider the factors in the course of evaluating potential benchmark

sources.” RZBC Grp. Shareholding Co. Ltd. V. United States, 40 CIT __, __, 2016 WL 3880773

at *9 (2016) (quotation marks omitted). Further, Commerce will “adjust the comparison price to

reflect the price that a firm actually paid or would pay if it imported the product.” Id. §

351.511(a)(2)(iv). This requires that Commerce calculate the benchmark based on a hypothetical

importer of the given product. See Changzhou Trina Solar Energy Co., Ltd. v. United States, 42

CIT __, __, 352 F. Supp. 3d 1316, 1338 (2018) (“As the court has indicated, however, Commerce

has determined that benchmark calculations are assessed based on a hypothetical importer making

a market-price purchase . . . .” (citation omitted)). But the court has been hesitant to endorse

benchmarks that use simple averages that give “undue weight” to small samples. See RZBC Grp.

Shareholding Co., Ltd. v. United States, 39 CIT __, __, 100 F. Supp. 3d 1288, 1308–11 (2015)

(holding that a simple average between a quantity unknown dataset and a high-cost, low-quantity

dataset may have distorted the benchmark by giving undue weight to small shipments).

       Commerce did not sufficiently comply with the court’s remand order. In the remand order,

the court expressed a concern that the Descartes data “appear[ed] to be sourced from limited

samples because many of the shipments use the same tariff codes and freight forwarder codes.”

Risen, 570 F. Supp. 3d at 1379. On remand, however, Commerce only responded that it could not

conclude that these codes “indicate a shipment method that an importer of the materials at issue
Consol. Court No. 20-03912                                                               Page 18

would be unlikely to use.” Remand Results at 15. The court’s concern was not about whether this

was a shipping method a Chinese company would use, but instead about whether the Descartes

data was a high-cost, low-quantity dataset that improperly ballooned the benchmark when

averaging. See Risen, 570 F. Supp. 3d at 1379; see also RZBC Grp. Shareholding, 100 F. Supp.

3d at 1308–11. Commerce did not fully consider the potential impact that a small sample size

could have when affecting the comparability of the Descartes and Xeneta datasets. See 19 C.F.R.

§ 351.511(a)(2)(ii). Although Commerce may calculate the benchmark based on a hypothetical

importer of a product, the source must still be appropriate, and until Commerce addresses whether

the tariff codes and freight forwarder codes indicate a small sample size, the court cannot sustain

Commerce’s benchmark calculation. Thus, Commerce did not comply with the court’s remand

instructions, and the determination is not supported by substantial evidence. The Xeneta data

seems to provide a broadly based average. If Commerce cannot supply a convincing reason as to

why the Descartes data improves accuracy, Commerce should not use it.

                                        CONCLUSION

       As to EBCP, the Remand Results set standards not appropriately applied to this particular

factual record. As to land value and ocean freight, Commerce did not properly consider the quality

of data sets it averaged. Defects in data are not cured by averaging with better data. For the

foregoing reasons, the court remands to Commerce for a determination consistent with this opinion

on all three issues. The remand shall be issued within 60 days hereof. Comments may be filed 30

days thereafter and any response 15 days thereafter.

                                                                    /s/ Jane A. Restani
                                                                    Jane A. Restani. Judge

Dated: April 11, 202
       New York, New York