                              Slip Op. 09-64

            UNITED STATES COURT OF INTERNATIONAL TRADE

                                    :
SHANDONG MACHINERY IMPORT &         :
EXPORT COMPANY                      :
                                    :
                 Plaintiff,         :
                                    : Before: Richard K. Eaton, Judge
           v.                       :
                                    : Court No. 07–00355
UNITED STATES,                      :
                                    : Public Version
                 Defendant,         :
                                    :
     and                            :
                                    :
AMES TRUE TEMPER and                :
COUNCIL TOOL COMPANY, INC.,         :
                                    :
                 Def.-Ints.         :
                                    :


                          OPINION AND ORDER

[Department of Commerce’s final results sustained in part and
remanded]


                                                 Dated: June 24, 2009


     Hume & Associates LLC (Robert T. Hume) for plaintiff.

     Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director; Patricia M. McCarthy, Assistant Director, Civil
Division, Commercial Litigation Branch, United States Department
of Justice (Courtney E. Sheehan); Office of Chief Counsel for
Import Administration, United States Department of Commerce
(Nithya Nagarajan), of counsel, for defendant.

     Wiley Rein LLP (Eileen P. Bradner, Timothy C. Brightbill and
Maureen E. Thorson), for defendant-intervenor Ames True Temper.

     Kelley Drye & Warren, LLP (Eric McClafferty), for defendant-
intervenor Council Tool Company, Inc.
Court No. 07-00355                                            Page 2


     Eaton, Judge:   This action is before the court on plaintiff

Shandong Machinery Import & Export Company’s (“SMC”) USCIT R.

56.2 motion for judgment upon the agency record.    See Pl.’s Mem.

Supp. Mot. J. Agency R. (“Pl.’s Mem.”).   Defendant United States

together with defendant-intervenors Ames True Temper and the

Council Tool Company, Inc. oppose this motion.     See Def.’s Resp.

to Pl.’s Mot. for J. Agency R. (“Def.’s Resp.”); Def.-Int.’s Br.

in Resp. to Pl.’s Mot. for J. Agency R.; Resp. Br. of Def.-Int.

Council Tool Company, Inc.

     By its motion, SMC challenges the final results of the

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

“Department”) fifteenth administrative review of antidumping duty

orders covering heavy forged hand tools (“HFHTs”) from the

People’s Republic of China (“PRC”) for the period of review

beginning on February 1, 2005, and ending on January 30, 2006

(“POR”).   See HFHTs, Finished or Unfinished, With or Without

Handles, From the PRC, 72 Fed. Reg. 51,787 (Dep’t of Commerce

Sept. 11, 2007) (final results) and the accompanying Issues and

Decision Memorandum (Dep’t of Commerce Sept. 4, 2007) (“Issues &

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

imports of HFHTs are subject to individual antidumping duty

orders covering separate categories of goods, including those at

issue here:   bars/wedges; hammers/sledges; and axes/adzes.      Id.

     In the Final Results, Commerce found that plaintiff failed
Court No. 07-00355                                          Page 3


to rebut the non-market economy (“NME”) presumption of government

control.1   As a result, Commerce applied country-wide antidumping

duty rates (“PRC-wide rates”) to SMC’s exports.   See Issues &

Dec. Mem. at Comment 1; HFHTs, Finished or Unfinished, With or

Without Handles, From the PRC, 72 Fed. Reg. 10,492 (Dep’t of

Commerce Mar. 8, 2007) (“Prelim. Results”).   The PRC-wide rates

assigned by Commerce were: 139.31 percent for bars/wedges, 45.42

percent for hammers/sledges, and 189.37 percent for axes/adzes.

     The court has jurisdiction pursuant to 28 U.S.C. § 1581(c)

and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006).   For the following

reasons, the court sustains Commerce’s Final Results in part and

remands the rate for hammers/sledges to Commerce for further

findings consistent with this opinion.




     1
          A non-market economy includes “any foreign country that
the administering authority [Commerce] determines does not
operate on market principles of cost or pricing structures, so
that sales of merchandise in such country do not reflect the fair
value of the merchandise.” 19 U.S.C. § 1677(18)(A) (2006);
Shandong Huarong Gen. Group Corp. v. United States, 28 CIT 1624,
1625 n.1, Slip Op. 04-117 at 3 n.1 (2004) (not reported in the
Federal Supplement).

     “Any determination that a foreign country is a nonmarket
economy country shall remain in effect until revoked by the
administering authority.” 19 U.S.C. § 1677(18)(C)(i) (2006).
The PRC has been determined to be an NME country. The Department
has treated the PRC as a non-market economy country in all past
antidumping investigations. Zhejiang Native Produce & Animal By-
Products Imp. and Exp. Corp. v. United States, 27 CIT 1827, 1834
n.14, Slip Op. 03-151 at 12 n.14 (2003) (not reported in the
Federal Supplement) (citations omitted).
Court No. 07-00355                                           Page 4


                          STANDARD OF REVIEW

     When reviewing Commerce’s final antidumping determinations,

the court “shall hold unlawful any determination, finding, or

conclusion found . . . to be unsupported by substantial evidence

on the record, or otherwise not in accordance with law . . . .”

19 U.S.C. § 1516a(b)(1)(B)(i) (2006).



                              DISCUSSION

I.   PRC-Wide Rate

     A.   Legal Framework

     When conducting an investigation or review of an NME

country, Commerce employs a presumption of state control.     See

Coal. for the Pres. of Am. Brake Drum & Rotor Aftermarket Mfrs.

v. United States, 23 CIT 88, 100, 44 F. Supp. 2d 229, 242 (1999).

To rebut this presumption and thus qualify for a separate rate,

an exporter must “affirmatively demonstrate its entitlement to a

separate, company-specific margin . . . .”     Sigma Corp. v. United

States, 117 F.3d 1401, 1405 (Fed. Cir. 1997) (“Sigma”) (citation

and quotation omitted).

     To establish that a firm is sufficiently independent from

government control to be entitled to a separate rate, the

Department requires respondents to demonstrate the absence of

both de jure and de facto government control over export

activities.   See Peer Bearing Co.-Changshan v. United States, 32
Court No. 07-00355                                              Page 5


CIT __, __, 587 F. Supp. 2d 1319, 1324 (2008) (“Peer Bearing”);

see also Sparklers from the PRC, 56 Fed. Reg. 20,588, 20,589

(Dep’t of Commerce May 6, 1991) (final determination of sales at

less than fair value).

             Absence of de jure government control can be
             demonstrated by reference to legislation and
             other governmental measures that decentralize
             control. Absence of de facto government
             control can be established by evidence that
             each exporter sets its prices independently
             of the government and of other exporters, and
             that each exporter keeps the proceeds of its
             sales.

Sigma, 117 F.3d at 1405 (citations omitted).

       When a company fails to rebut the presumption of state

control, Commerce employs that presumption and applies the PRC-

wide rate to its products.     See Id. at 1405.



       B.    Application of PRC-Wide Rate to SMC

       In the Final Results, Commerce stated that SMC failed to

“supply the Department with all the information and documentation

necessary for it to demonstrate that it is eligible for separate

rates.”     Issues & Dec. Mem. at Comment 1.   Moreover, it found

that

             [d]espite being given several opportunities,
             SMC failed to provide complete or consistent
             responses to our questions, rendering it
             impossible to adequately determine whether or
             not SMC’s business operations are free from
             de jure or de facto government control. We
             are unable to definitively determine who owns
Court No. 07-00355                                            Page 6


            SMC, who controls SMC, and the nature of
            SMC’s relationship with the national,
            provincial, and local governments.2

Issues & Dec. Mem. at Comment 1.    Accordingly, Commerce concluded

that plaintiff failed to rebut the presumption of government

control and failed to establish its eligibility for a rate

separate from the PRC-wide rate.

     By its motion, plaintiff contends that Commerce wrongfully

applied the PRC-wide rates to its sales of bars/wedges,

hammers/sledges and axes/adzes because it demonstrated absence of

government control and qualified for separate rates.    Pl.’s Mem.

12-16.   Plaintiff makes several arguments to support its

position.    Specifically, the company states that the PRC Foreign

Trade Law, PRC Whole People Law, its business license and its

export license demonstrate de jure independence from state

control.    Pl.’s Mem. 13-14.   Moreover, plaintiff asserts that it

demonstrated de facto independence, particularly by producing

proof that the Shandong Foreign Trade Economic Committee had no

role in its export activities and that the Committee has never

provided any capital to plaintiff.    Pl.’s Mem. 16.

     In response, Commerce first argues that it was unable to

determine who owned or controlled plaintiff based on plaintiff’s


     2
          Here, because the court finds that SMC has failed to
demonstrate that it is free of national governmental control, it
makes no finding with respect to provincial or local governmental
control.
Court No. 07-00355                                             Page 7


responses to a series of questionnaires.    Def.’s Resp. 15.

Commerce states that, in its original questionnaire, it asked

plaintiff to “describe and explain” who owned the company,

including the “full name and address of the individual(s),

corporation(s), or entities that own your company.”    SMC’s Resp.

to Commerce’s Section A Questionnaire dated May 11, 2006

(“Original Section A Resp.”) 8.   Plaintiff responded, “SMC is

owned by its shareholders[,]” but failed to include the full name

or address of any of these “shareholders.”    Original Section A

Resp. 8.

     Dissatisfied with plaintiff’s response, Commerce then issued

its first supplemental questionnaire.    See SMC’s Resp. to

Commerce’s Supp. Sections A, C, and D Questionnaires dated May

23, 2006 (“First Supp. Resp.”) 3-4.   The first supplemental

questionnaire asked whether any other person or party had ever

owned plaintiff, whether plaintiff traded publicly, how many

shareholders plaintiff had, who held more than 1.99 percent of

plaintiff’s shares, and asked for a description of the classes of

plaintiff’s shares together with a    “detailed text explanation of

the ownership of SMC.”   First Supp. Resp. 3-4.   Plaintiff

responded to the first supplemental questionnaire by stating that

it was “all-people owned, which means each member of SMC is

responsible for his or her gain and loss.    SMC is not a limited

liability company.   To the extent that shareholders refer to the
Court No. 07-00355                                             Page 8


employees at SMC; SMC currently has [a certain number of]

employee ‘shareholders.’”   First Supp. Resp. 4.   Plaintiff also

stated that it was independent from the central and provincial

governments, a “private enterprise,” “not publicly traded,” and

that it did “not have classes of shares.”   First Supp. Resp. 3-4.

     Commerce remained unsatisfied with plaintiff’s questionnaire

responses and issued a second supplemental questionnaire.     In

this second supplemental questionnaire, Commerce asked plaintiff

whether “all-people owned” meant that “SMC [was] owned by all the

people of the [PRC].”   SMC’s Resp. to Commerce’s Supp. Sections

A, C, and D Questionnaires dated Jan. 22, 2007 (“Second Supp.

Resp.”) 1.   Plaintiff responded that “state-owned” and “all

people-owned” had “the same meaning and [were] interchangeable.”

Second Supp. Resp. 1.   With its response to the second

supplemental questionnaire, plaintiff also included a letter from

the Shandong Province Foreign Economic Trade Cooperation Bureau

(“SPFETCB”) “certifying the ownership status of SMC.”     Second

Supp. Resp. 1.   The letter states, “Shandong Machinery Import &

Export Group Corp. is [an] all-people owned enterprise, the

description shown on its business license is state-owned

enterprise, all-people owned and state-owned enterprises are the

same in term[s] of character.”   Second Supp. Resp. at Ex. 1.

     In the second supplemental questionnaire, Commerce also

asked plaintiff to “[p]rovide a detailed text explanation of the
Court No. 07-00355                                            Page 9


difference between the terms ‘all-people owned’ and ‘whole people

owned,’ as cited in” plaintiff’s response to the first

supplemental questionnaire.   Second Supp. Resp. 1.   Plaintiff

responded by referencing Article 6 of the PRC Constitution and

stating that “all-people owned” meant “collective ownership by

the working people.” Second Supp. Resp. 1.

           According to Article 6 of the Constitution
           Law of the PRC, “the basis of the socialist
           economic system of the PRC is the socialist
           public ownership of the means of production,
           namely, ownership by the whole people and
           collective ownership by the working people.”
           The terms “state-owned” enterprise, “all
           people-owned” enterprise, and “whole people-
           owned” enterprise have the same meaning and
           are interchangeable. In order to clarify
           SMC’s ownership status as an all people-owned
           enterprise, Shandong Province Foreign
           Economic Trade Cooperation Bureau has
           provided an official letter certifying the
           ownership status of SMC.

Second Supp. Resp. 2.

     In addition, in the second supplemental questionnaire,

Commerce asked plaintiff to explain material on certain websites

that suggested SMC might be a “nationalized business,” “state-

owned business” or “state-owned enterprise.” Second Supp. Resp.

2, 4-5.   Rather than explaining the website material, plaintiff

responded by referencing Article 6 of the PRC Constitution and

the SPFETCB letter.   Second Supp. Resp. 2, 4-5.   Additionally, in

the second supplemental questionnaire, Commerce asked plaintiff

to explain the word “private” in its first supplemental
Court No. 07-00355                                               Page 10


questionnaire response that it was an “‘all-people owned’ private

enterprise.”    Second Supp. Resp. 3.   Plaintiff responded, “SMC

regrets the use of the word ‘private’ in its prior response and

hereby retracts the use of this word.     SMC merely meant to convey

that SMC is non-public.”    Second Supp. Resp. 3.

     Further, in the second supplemental questionnaire, Commerce

again asked plaintiff to “[l]ist and provide the address of any

and every entity or person who holds more than 1.99 percent of

the shares of SMC.” Second Supp. Resp. 3.     In its response,

plaintiff referred to “Shandong Foreign Trade Economic

Committee.”    Second Supp. Resp. 4.3   Plaintiff attempted to

qualify its response by stating that the Committee “merely

provides a supervisory function to SMC.”     Second Supp. Resp. 4.

     As the foregoing demonstrates, plaintiff failed to rebut the

presumption of de jure government control, i.e., it has not

demonstrated that it is not owned or controlled by the PRC.

Indeed, rather than demonstrating the absence of state control,

plaintiff’s answers suggest that the company was, in fact, under

state control.    This being the case, because both de jure and de

facto independence must be shown in order to qualify for a

separate rate, the court need not address plaintiff’s claims of



     3
          Plaintiff stated that “Shandong Foreign Trade Economic
Committee . . . is SMC’s investor and the department in charge.”
Second Supp. Resp. 4.
Court No. 07-00355                                              Page 11


de facto independence from governmental control.     See Peer

Bearing, 32 CIT at __, 587 F. Supp. 2d at 1324.

      Because SMC has failed to rebut the presumption that it is

controlled by the Chinese government it is not entitled to a

separate rate.   See Shandong Huarong Gen. Group Corp. v. United

States, 27 CIT 1568, 1591, Slip Op. 03-135 at 37 (2003) (not

reported in the Federal Supplement).   As a result, Commerce may

apply the PRC-wide rate to that company’s exports.     Id. at 38.



II.   Selection of PRC-Wide Rates for Bars/Wedges,
      Hammers/Sledges, and Axes/Adzes

      A.   Legal Framework

      In seeking a PRC-wide rate based on AFA, the Department may

use information derived from the petition, a final determination

in the investigation, any prior administrative review, or any

other information placed on the record.   See 19 U.S.C.

§ 1677e(b); Statement of Admin. Action accompanying the Uruguay

Round Agreements Act, H.R. Rep. 103-316 at 870, reprinted in 1994

U.S.C.C.A.N. 4040, 4199 (stating that secondary information is

“information derived from the petition that gave rise to the

investigation or review, the final determination concerning the

subject merchandise, or any previous review under [19 U.S.C.

§ 1675] concerning the subject merchandise”).   Where, as here,

Commerce relies on secondary information such as calculated rates
Court No. 07-00355                                            Page 12


from previous reviews, rather than information obtained in the

course of a current investigation or review, the Department must

“to the extent practicable, corroborate that information from

independent sources that are reasonably at [its] disposal.”    19

U.S.C. § 1677e(c); see 19 C.F.R. § 351.308(d).    To corroborate

secondary information, Commerce must “examine whether the

secondary information to be used has probative value.”     See 19

C.F.R. § 351.308(d).

     Probative value means that the rate must be both a) reliable

and b) relevant.     See Ferro Union, Inc. v. United States, 23 CIT

178, 202, 44 F. Supp. 2d 1310, 1333 (1999) (“Ferro Union”).

Commerce must do more than assume “any prior calculated margin

for the industry is reliable and relevant.”    Id. at 204, 44 F.

Supp. 2d at 1334.    Indeed, “[i]n order to comply with the statute

and the [Statement of Administrative Action]’s statement that

corroborated information is probative information, Commerce must

assure itself that the margin it applies is relevant, and not

outdated, or lacking a rational relationship to [the

respondent].”   Id. at 205, 44 F. Supp. 2d at 1335.

     Importantly, in the NME situation, there is no requirement

that the rate based on AFA relate specifically to the individual

company.   See Peer Bearing Co., 32 CIT at __, 587 F. Supp. 2d at

1327.   Rather, “the rate must be corroborated according to its

reliability and relevance to the countrywide entity as a whole.”
Court No. 07-00355                                              Page 13


Id. at __, 587 F. Supp. 2d at 1327 (citation omitted).     Thus, the

rates Commerce selects in this case must be reliable and relevant

to the PRC-wide entity,4 not specifically to SMC.



     B.   Corroboration of Secondary Information

     Commerce argues that the secondary information it used is

reliable and relevant such that it has probative value.    It

states:

          [T]o corroborate secondary information, the
          Department will, to the extent practicable,
          examine the reliability and relevance of the
          information used. However, unlike other
          types of information . . . there are no
          independent sources for calculated dumping
          margins. The only sources for calculated
          margins are administrative determinations.
          These rates are applied to the PRC-wide
          entity, i.e., only to companies not eligible
          for a separate rate with regard to the
          individual class or kind of merchandise. No
          information has been presented in the current
          review that calls into question the
          reliability of the information used for these
          AFA rates. Thus, the Department continues to
          find that the information is reliable.

Issues & Dec. Mem. at Comment 3.   Plaintiff challenges the

reliability and relevance of the rates.   Pl.’s Mem. 23.

Specifically, plaintiff argues that the Department “did not

utilize any measure to verify independently the reliability of



     4
          In antidumping proceedings, the PRC-wide entity and all
of its components are considered to be a single respondent. See
Sigma, 117 F.3d at 1405-07.
Court No. 07-00355                                               Page 14


the Bars/Wedges or Hammers/Sledges rates” and that the

“Department failed to verify and corroborate the calculated PRC-

wide and AFA rate” applied to axes/adzes.       Pl.’s Mem. 31.

       The court finds that substantial evidence supports the

conclusion that two of the selected AFA rates, i.e., 139.31

percent for bars/wedges and 189.37 percent for axes/adzes, were

properly corroborated as being reliable and, because of the

application of AFA, are relevant to the PRC as a whole.       As an

initial matter, the court finds reasonable the Department’s

decision to base the PRC-wide rates on AFA.       Each of the four

respondents were found to have been subject to an AFA rate and

nothing has been placed on the record to indicate that the

country-wide entity would not similarly be found to be subject to

AFA.       See AFA and Corroboration Memo. for Company Rates dated

Feb. 28, 2007 (“AFA and Corroboration Memo.”) at 12.

       With respect to the rates themselves, when faced with

determining a country-wide rate based on what it calls “total

AFA,”5 Commerce faces a difficult task.      Unlike rates that are


       5
          Commerce references “total adverse facts available,”
which is not referenced in either the statute or the agency’s
regulations. The phrase can be understood, within the context of
this case, as referring to Commerce’s application of adverse
facts available not only to the facts pertaining to specific
sales for which information was not provided, but to the facts
respecting all of respondents’ sales encompassed by the relevant
antidumping duty order. See Shandong Huarong Mach. Co. v. United
States, 30 CIT 1269, 1271 n.2, 435 F. Supp. 2d 1261, 1265 n.2
(2006), (citing Gerber Food (Yunnan) Co., Ltd. v. United States,
Court No. 07-00355                                             Page 15


calculated using responses to questionnaires, Commerce cannot

calculate an AFA rate for the PRC as a whole, because there are

no questionnaire responses from the PRC itself on which to rely.

What the record does contain is the questionnaire responses from

SMC and the other respondents in this review.   However, because

Commerce found all of the respondents to be subject to the

application of total AFA, the responses themselves were deemed

non-probative.   Indeed, for Commerce, the only value of the

responses is to confirm that this country-wide rate should be

based on AFA.    It is worth noting that the decision to apply AFA

to the country-wide entity has not been contested by any party.

Thus, the decision to apply an AFA rate to the PRC as a whole is

reasonable and is sustained.

     To determine an AFA rate, Commerce turned to its often used

methodology of choosing the highest rate from the original

investigation or from prior reviews.    See AFA and Corroboration

Memo.; Shanghai Taoen Int’l Trading Co. v. United States, 29 CIT

189, 360 F. Supp. 2d 1339 (2005) (upholding the AFA rate as

application of the highest available dumping margin from a

different respondent in a prior administrative review); Kompass

Food Trading Int’l v. United States, 24 CIT 678, 683 Slip Op. 00-




29 CIT __, __, 387 F. Supp. 2d 1270, 1285 n.3 (2005)).
Court No. 07-00355                                            Page 16


90 (2000) (not reported in the Federal Supplement) (affirming the

Department’s use of the highest available dumping margin from a

different, fully cooperative respondent in the less than fair

value investigation).

     For bars/wedges, Commerce assigned the 139.31 percent rate

as the PRC-wide margin.    Def.’s Mem. 28; Issues & Dec. Mem. at

Comment 3.   This is the rate calculated using verified

information provided by Tianjin Machinery Import & Export

Corporation, another respondent, in the eighth administrative

review of the bars/wedges order.    See HFHTs, Finished or

Unfinished, With or Without Handles, From the PRC, 71 Fed.

Reg. 54,269 at Comment 2 (Dep’t of Commerce Sept. 14, 2006)

(final results).   Commerce recently found this AFA and PRC-wide

rate to be sufficiently corroborated for use in the fourteenth

administrative review.    Def.’s Mem. 28; Issues & Dec. Mem. at

Comment 3; HFHTs, Finished or Unfinished, With or Without

Handles, From the PRC, 71 Fed. Reg. 54,269 at Comment 2 (Dep’t of

Commerce Sept. 14, 2006) (final results).

     For axes/adzes, Commerce used the calculated 189.37 percent

rate for Shandong Huarong Machinery Co., Ltd., based on its

verified sales and production data from the fourteenth

administrative review.    See Def.’s Mem. 28; Issues & Dec. Mem. at

Comment 2;   HFHTs, Finished or Unfinished, With or Without

Handles, From the PRC, 71 Fed. Reg. 54,269 at Comment 9 (Dep’t of
Court No. 07-00355                                             Page 17


Commerce Sept. 14, 2006) (final results).   Commerce then applied

this rate as AFA for the PRC-wide entity here.    See HFHTs,

Finished or Unfinished, With or Without Handles, From the PRC, 71

Fed. Reg. 54,269 at Comment 9 (Dep’t of Commerce Sept. 14, 2006)

(final results).

     As noted, Commerce is required to corroborate secondary

information “to the extent practicable.”    19 U.S.C. § 1677e(c).

Here, because the 139.31 percent rate for bars/wedges and the

189.37 percent rate for axes/adzes: (1) are from earlier reviews

of the same categories of merchandise; (2) are based on verified

information taken from similar companies; (3) have not been found

either unsupported by substantial evidence nor contrary to law by

any court; and (4) with the exception of plaintiff’s

subsidization argument, have not been challenged by any record

evidence,6 Commerce has satisfied its corroboration requirement.

The court thus upholds Commerce’s determination that the 139.31

percent rate for bars/wedges and 189.37 percent rate for


     6
          While it might seem a heavy burden on the plaintiff to
anticipate the use of these rates for assignment pursuant to AFA,
and to interpose objections to them, these rates have been used
as AFA consistently in past reviews. See, e.g., HFHTs, Finished
or Unfinished, With or Without Handles, From the PRC, 71 Fed.
Reg. 54,269 (Dep’t of Commerce Sept. 14, 2006) (final results)
(fourteenth review); HFHTs, Finished or Unfinished, With or
Without Handles, From the PRC, 70 Fed. Reg. 54,897 (Dep’t of
Commerce Sept. 19, 2005) (final results)(thirteenth review);
HFHTs, Finished or Unfinished, With or Without Handles, From the
PRC, 69 Fed. Reg. 55,581 (Dep’t of Commerce Sept. 15, 2004)
(final results) (twelfth review).
Court No. 07-00355                                              Page 18


axes/adzes are reliable.

     In addition to its contentions as to the reliability and

relevance of the assigned rates, plaintiff insists that the MUTT®

scraper should be excluded from the calculated PRC-wide and AFA

rate for axes/adzes.    Pl.’s Mem. 30-31.   That is, “[i]n effect,

the . . . calculated rate [from the fourteenth review] for

Axes/Adzes is based solely on the MUTT® scraper submitted to the

Department for a scope review.”    Pl.’s Mem. 30.   Plaintiff

contends that there is “compelling evidence” that the

manufacturing process used in creating the MUTT® scraper should

preclude it from inclusion in the scope of the HFHTs category.

Pl.’s Mem. 30.   According to plaintiff, if the MUTT® scraper

sales were eliminated from consideration, then Commerce would be

required to find a lower rate for axes/adzes.    However, as

plaintiff also acknowledges, this Court has previously held that

the MUTT is, in fact, subject to the terms of the axes/adzes

order.   Pl.’s Mem. 30; see Tianjin Mach. Imp. & Exp. Corp. v.

United States, 31 CIT __, __, Slip Op. 07-131 at 17 n.4 (Aug. 28,

2007) (not reported in the Federal Supplement) (“Tianjin”).       That

being the case, there is no reason to exclude a rate based on

MUTT® exports.

     With respect to hammers/sledges, the court reaches a

different conclusion.    For this merchandise Commerce used the

45.42 percent rate calculated as the best information available
Court No. 07-00355                                          Page 19


(“BIA”)7 rate during a 1991 less than fair value (“LTFV”)

investigation of the China National Machinery Import & Export

Corporation.   See Def.’s Mem. 28; Issues & Dec. Mem. at Comment

3; HFHTs, Finished or Unfinished, With or Without Handles, From

the PRC, 56 Fed. Reg. 241 (Dep’t of Commerce Jan. 3, 1991) (final

results).   Commerce most recently used this rate as the AFA and

PRC-wide rate during the fourteenth administrative review. See

Def.’s Mem. 28; Issues & Dec. Mem. at Comment 3; HFHTs, Finished

or Unfinished, With or Without Handles, From the PRC, 71 Fed.

Reg. 54,269 (Dep’t of Commerce Sept. 14, 2006) (final results).

     The rate, however, was not corroborated.   Rather, the rate,

based on BIA, was calculated in the 1991 LTFV investigation of

the China National Machinery Import & Export Corporation.   See

HFHTs, Finished or Unfinished, With or Without Handles, From the

PRC, 56 Fed. Reg. 241 (Dep’t of Commerce Jan. 3, 1991) (final

results) (“Because we have rejected CMC’s questionnaire response

and are using best information available for our determinations,



     7
          BIA is the predecessor to AFA. In the Statement of
Administrative Action of the Uruguay Round Agreements Act of
1994, Pub.L. No. 103-465, 108 Stat. 4809 (1994), Congress
explained that the Uruguay Round amended the prior law, which
“mandate[d] use of the best information available (commonly
referred to as BIA) if a person refuse[d] or [was] unable to
produce information in a timely manner or in the form required.”
H.R. Doc. No. 103-316 (1994) at 868, reprinted in 1994
U.S.C.C.A.N. 4040, 4198. Shandong Huarong Mach. Co. v. United
States, 30 CIT 1269, 1282 n.9, 435 F. Supp. 2d 1261, 1274 n.9
(2006).
Court No. 07-00355                                              Page 20


we did not verify CMC’s questionnaire response.”).     Rather than

using verified information, the Department used information

submitted by the petitioner.    Specifically, Commerce calculated

an average of the margins contained in the petition for each

class or kind of merchandise, as adjusted for calculation errors

in the petition.     See Id. at Comment 4; HFHTs, Finished or

Unfinished, With or Without Handles, From the PRC, 55 Fed. Reg.

42,420 (Dep’t of Commerce Oct. 19, 1990) (preliminary

determination).    Therefore, Commerce took no steps to corroborate

the information during the LTFV investigation.     That being the

case, Commerce failed to comply with the corroboration

requirement found in 19 U.S.C. § 1677e(c) and 19 C.F.R.

§ 351.308(d).   Consequently, the 45.42 percent rate is not

reliable, and the court directs Commerce, on remand, to assign a

different rate to hammers/sledges that has been “corroborated

according to its reliability and relevance to the country-wide

entity as a whole.” Peer Bearing, 31 CIT at __, 587 F. Supp. 2d

at 1327 (citation omitted).



     C.   The Bars/Wedges Rate Is Not Punitive

     Plaintiff also contends that the 139.31 percent rate for

bars/wedges is punitive.    Pl.’s Mem. 27.   In making its case,

plaintiff argues that this Court invalidated the 139.31 percent

rate for bars and wedges as punitive and aberrational in Shandong
Court No. 07-00355                                           Page 21


Huarong Gen. Corp. v. United States, 29 CIT 1227, Slip Op. 05-129

(2005) (not published in the Federal Supplement) (“Huarong III”).

In fact, in Huarong III, this Court remanded Commerce’s use of

the rate not because the rate was unreliable or irrelevant to the

PRC-wide entity, but because the rate lacked specific reliability

and relevance to the individual companies that were parties to

that case.   Huarong III, 29 CIT at 1332, Slip Op. 05-129 at 12.

The Huarong III plaintiffs qualified for separate rates.     Huarong

III, 29 CIT at 1228, Slip Op. 05-129 at 3.   Here, SMC failed to

qualify for a separate rate and Commerce has no obligation to

corroborate the rate as to SMC itself.   See Peer Bearing, 31 CIT

at __, 587 F. Supp. 2d at 1327.   Thus, Huarong III does not

support plaintiff’s contention.   Moreover, plaintiff cites to no

evidence on the record relating to what a calculated rate for the

PRC-wide entity might be.   As such, plaintiff has made no

convincing argument that the assigned rate is punitive.



     D.   There Is No Evidence of Subsidization in the AFA/PRC-
          Wide Rates

     Lastly, plaintiff contends that the Department must

recalculate the margins from prior segments of these proceedings

in order to corroborate the AFA/PRC-wide rates.   Specifically,

plaintiff contends that “[t]he Department previously determined

Indian export data cannot be used for surrogate values because of
Court No. 07-00355                                            Page 22


Indian subsidies and that South Korea, Thailand, and Indonesia

maintain broadly available, non-industry specific export

subsidies that may benefit all exporters to all export markets.”

Pl.’s Mem. 23-24 (citation omitted).   Accordingly, plaintiff

argues, the Department must exclude: “1) any Indian imports of

steel from the United Kingdom, Belgium, Canada, or Germany in

calculating the AFA/PRC-wide rate for Hammers/Sledges and 2) the

Indian imports of steel from the United Kingdom, Belgium, and

Germany in calculating the AFA/PRC-wide rate for Axes/Adzes.”

Pl.’s Mem. 24.   In addition, plaintiff argues that the Department

must also exclude United States data because the United States

subsidizes exports.   Pl.’s Mem. 25.

     Despite plaintiff’s contentions that the AFA/PRC-wide rates

applied to sales of bars/wedges and hammers/sledges are distorted

by subsidization, its claim must be rejected for two reasons:

first, because it is well settled that the “record for judicial

review should ordinarily not contain material from separate

investigations, including records of separate administrative

reviews arising out of the same antidumping duty order, as is the

case here,”(Sanyo Elec. Co. v. United States, 23 CIT 355, 361, 86

F. Supp. 2d 1232, 1239 (1999) (citations and quotation omitted));

and second, because this Court has continually rejected this

argument where, as here, plaintiffs have “provided no evidence to

support their assertion” that “the surrogate value Commerce
Court No. 07-00355                                           Page 23


employed was distorted by subsidies.”     See Tianjin, 31 CIT at __,

Slip Op. 07-131 at 40 (“While plaintiffs insist that the

surrogate value Commerce employed was distorted by subsidies,

they have provided no evidence to support their assertion.    Thus,

the court cannot credit plaintiffs’ subsidy objection.”).

Accordingly, plaintiffs’ assertion that the objected to values

were subsidized must be rejected.



                            CONCLUSION

     For the foregoing reasons, the court sustains Commerce’s

final determination in part and remands for further findings,

consistent with this opinion, with respect to the calculated

45.42 percent rate for hammers/sledges.    The remand results shall

be due on November 2, 2009; comments to the remand results shall

be due on December 7, 2009; and replies to such comments shall be

due on December 21, 2009.



                                             /s/ Richard K.Eaton
                                             Richard K. Eaton

Dated:    June 24, 2009
          New York, New York
