                              Slip Op. 07-138

           UNITED STATES COURT OF INTERNATIONAL TRADE


SHANGHAI ESWELL ENTER. CO.,        :
LTD.; JINFU TRADING CO., LTD.;     :
and ZHEJIANG NATIVE PRODUCE        :
AND ANIMAL BY-PRODUCTS IMPORT      :
& EXPORT GROUP CORP.,              :   Before: Richard K. Eaton, Judge
                                   :
                 Plaintiffs,       :   Court No. 05-00439
                                   :
          v.                       :   Public Version
                                   :
UNITED STATES,                     :
                                   :
                 Defendant,        :
                                   :
          and                      :
                                   :
THE AMERICAN HONEY PRODUCERS       :
ASSOCIATION OF AMERICA AND         :
THE SIOUX HONEY ASSOCIATION,       :
                                   :
                 Deft.-Ints.       :
                                   :


                          OPINION AND ORDER

[United States Department of Commerce’s final results are
sustained in part and remanded.]


                                                Dated: September 13, 2007

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP (Bruce
M. Mitchell, Ned H. Marshak, Adam M. Dambrov, Paul G. Figueroa),
for plaintiffs.

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (David S. Silverbrand); Office of
the Chief Counsel for Import Administration, United States
Department of Commerce (Douglas S. Ierley), for defendant.

Kelley Drye Collier Shannon (Michael J. Coursey, Adam H. Gordon
and R. Alan Luberda), for defendant-intervenors.
Court No. 05-00439                                       Page 2

     Eaton, Judge: This matter is before the court on the Rule

56.2 motion for judgment upon the agency record of plaintiffs

Shanghai Eswell Enterprise Co., Ltd. (“Shanghai Eswell”); Jinfu

Trading Co., Ltd. (“Jinfu PRC”); and Zhejiang Native Produce and

Animal By-Products Import & Export Group Corp. (“Zhejiang”)

(collectively, “plaintiffs”).    See Pls.’ Br. Supp. R. 56.2 Mot.

J. Agency R. (“Pls.’ Mem.”).    Defendant the United States and

defendant-intervenors the American Honey Producers Association

and the Sioux Honey Association oppose the motion.    See Def.’s

Mem. Opp’n Pls.’ Mot. J. Agency R. (“Def.’s Opp’n”); Def.-Ints.’

Br. Opp’n Pls.’ Mot. J. Agency R.

     By their motion, plaintiffs challenge certain aspects of the

final results of the United States Department of Commerce’s

(“Commerce” or the “Department”) second administrative review of

the antidumping duty order on honey from the People’s Republic of

China (“PRC”) for the period of review beginning on December 1,

2002, and ending on November 30, 2003 (“POR”).    See Honey from

the PRC, 70 Fed. Reg. 38,873, 38,874 (Dep’t of Commerce July 6,

2005) (final results) and the accompanying Issues and Decision

Memorandum (June 27, 2005), Pub. Doc. 341 (“Issues & Dec. Mem.”)

(collectively, “Final Results”).    Jurisdiction is had pursuant to

28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii)

(2000).   For the reasons set forth below, the court sustains the

Final Results in part and remands this case to Commerce for
Court No. 05-00439                                          Page 3

further action consistent with this opinion.



                       STANDARD OF REVIEW

     The court reviews the Final Results under the substantial

evidence and in accordance with law standard set forth in 19

U.S.C. § 1516a(b)(1)(B)(i) (“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 . . . .”).    “Substantial evidence is

‘such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.’”     Huaiyin Foreign Trade Corp.

(30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003)

(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

It “requires more than a mere scintilla, but is satisfied by

something less than the weight of the evidence.”     Altx, Inc. v.

United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004) (internal

quotation marks & citations omitted).    The existence of

substantial evidence is determined “by considering the record as

a whole, including evidence that supports as well as evidence

that ‘fairly detracts from the substantiality of the evidence.’”

Huaiyin (30), 322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v.

United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).       The

possibility of drawing two equally justifiable, yet inconsistent

conclusions from the record does not prevent the agency’s
Court No. 05-00439                                       Page 4

determination from being supported by substantial evidence.       See

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966); see also

Altx, Inc., 370 F.3d at 1116.   The court “must affirm

[Commerce’s] determination if it is reasonable and supported by

the record as a whole, even if some evidence detracts from

[Commerce’s] conclusion.”   Nippon Steel Corp. v. United States,

458 F.3d 1345, 1352 (Fed. Cir. 2006) (internal quotation marks &

citation omitted).



                            DISCUSSION

I.   Normal Value

     In determining whether the subject merchandise is being, or

is likely to be, sold at less than fair value, 19 U.S.C.

§ 1677b(a) requires Commerce to make “a fair comparison . . .

between the export price1 or constructed export price2 and normal

value.”   When merchandise that is the subject of an antidumping




     1
          The “export price” is “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 or to an unaffiliated
purchaser for exportation to the United States,” as adjusted. 19
U.S.C. § 1677a(a).
     2
          “Constructed export price” is “the price at which the
subject merchandise is first sold . . . in the United
States . . . by or for the account of the producer or exporter of
such merchandise or by a seller affiliated with the producer or
exporter, to a purchaser not affiliated with the producer or
exporter,” as adjusted. 19 U.S.C. § 1677a(b).
Court No. 05-00439                                        Page 5

investigation is exported from a nonmarket economy (“NME”)3

country, such as the PRC, Commerce, under most circumstances,

determines normal value by valuing the factors of production used

in producing the merchandise using surrogate data, to which it

adds “an amount for general expenses and profit plus the cost of

containers, coverings, and other expenses.”   19 U.S.C.

§ 1677b(c)(1).

     The facts surrounding Commerce’s selection of surrogate data

to value raw honey and to derive selling, general and

administrative expenses (“SG&A”); overhead; and profit

(“surrogate financial ratios”) are not new to the court.

Commerce’s construction of normal value for raw honey is the

subject of another challenge to Commerce’s second administrative

review of the antidumping duty order on Chinese honey in Wuhan

Bee Healthy Co. v. United States, 31 CIT __, Slip Op. 07-113

(July 20, 2007) (not reported in the Federal Supplement)



     3
          A “nonmarket economy country” is “any foreign country
that [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). “Because it deems China to be a
nonmarket economy country, Commerce generally considers
information on sales in China and financial information obtained
from Chinese producers to be unreliable for determining, under 19
U.S.C. § 1677b(a), the normal value of the subject merchandise.”
Shanghai Foreign Trade Enters. Co. v. United States, 28 CIT __,
__, 318 F. Supp. 2d 1339, 1341 (2004). Therefore, since the
subject merchandise comes from the PRC, Commerce constructed
normal value by valuing the factors of production using surrogate
data from India. See 19 U.S.C. § 1677b(c)(4).
Court No. 05-00439                                       Page 6

(“Wuhan I”).



     A.   Valuation of the Factors of Production

     With respect to Commerce’s construction of normal value,

plaintiffs first challenge Commerce’s decision, when valuing raw

honey, to rely exclusively on surrogate data from India taken

from a Web site maintained by EDA Rural Systems Pvt. Ltd., an

Indian organization that provides business development services

to the honey and beekeeping sector (“EDA Data”).4    Pls.’ Mem. 2.

Based on this data, Commerce derived an average price for raw

honey of 74.90 Rupees per kilogram during the POR.    See Factors

of Production Valuation Mem. for the Final Results, Pub. Doc. 340

(“Final FOP Mem.”) at 2.   In deciding to use EDA Data exclusively

in valuing raw honey, Commerce rejected articles from three



     4
          In the Final Results, Commerce explained its decision
to value raw honey with EDA Data: “[T]he EDA Data . . .
constitute[s] a[n] . . . appropriate surrogate value source for
this POR. [It is] . . . the best information currently available
because it is publicly available, quality data, specific to the
raw honey beekeeping industry in India, and contemporaneous with
the POR.” Issues & Dec. Mem. at 10. With respect to quality,
Commerce found that “the EDA Data source is highly documented,
including numerous specific price points over a six year period
for multiple types of honey from many suppliers, and includes
detailed information on production, inputs, and beekeepers.” Id.
at 10-11. With respect to specificity, Commerce noted that “the
prices quoted in the EDA Data are specific to the raw honey
beekeeping industry in the state of Bihar in India.” Id. at 11.
With respect to contemporaneity, Commerce found that “the EDA
Data is contemporaneous to this administrative review . . . and
it includes monthly data points over a majority of the POR.” Id.
(footnote omitted).
Court No. 05-00439                                          Page 7

sources: (1) Hindu Business Line;5 (2) Indiainfoline;6 and (3)

Indian Express.7

     Plaintiffs insist that it was unreasonable for Commerce to

rely exclusively on the EDA Data to value raw honey and that

Commerce should have averaged the EDA Data with that found in the

three publications.    Pls.’ Mem. 11-16.   In Wuhan I, the court

upheld Commerce’s rejection of the articles.    First, with respect

to the Hindu Business Line article, the court found:

            Commerce was justified in rejecting the Hindu
            Business Line article. In a single sentence
            the article states a range of prices received
            by a single producer, the Girijan Co-
            operative Corporation Ltd. The EDA Data, on
            the other hand, contains information on
            numerous producers and therefore represents a
            wider range of prices. In addition, there is
            no indication that the sources of the data
            contained in the Hindu Business Line article
            are publicly available.

Wuhan I, 31 CIT at __, Slip Op. 07-113 at 32 (citations to record

omitted).    Next, the court found no error in Commerce’s

conclusion that the Indiainfoline article was unreliable:

            Commerce found that unlike the EDA Data, the
            sources of which were well-documented and
            made available by a business entity, the
            Indiainfoline article contained nothing to


     5
            “Girijan co-op targets Rs 135-cr turnover” (dated Apr.
17, 2003).
     6
          “Prospects of Bee Keeping in Rubber Plantations of
Kerala” (dated Sept. 2, 2003).
     7
            “In Jharkhand, it’s all about honey, honey” (dated Feb.
17, 2003).
Court No. 05-00439                                        Page 8

          indicate it was reliable. In particular,
          there was “no additional information on the
          author’s qualifications or the sources of his
          information” other than his status as a
          first-year business student.

Id., 31 CIT at __, Slip Op. 07-113 at 32-33.   Finally, the court

sustained Commerce’s decision not to rely on the Indian Express

article noting that it was not “as representative as the EDA Data

because it pertained to the experience of only a single

beekeeper.”   Id., 31 CIT at __, Slip Op. 07-113 at 33.    Because

the facts here are the same as those in Wuhan I, the court

follows its conclusions in that case and finds that Commerce’s

decision not to average the EDA Data with the data found in the

three articles was reasonable.

     In addition to the arguments made in Wuhan I concerning the

EDA Data, plaintiffs make additional claims, the principal one

being that Commerce did not adequately consider the decline in

prices in the second half of the POR.   Pls.’ Mem. 10.    In

particular, plaintiffs cite information they placed on the record

from the World Trade Atlas, which indicated a decline in export

prices during the second half of the POR (July 2003 to November

2003), from one hundred twelve Rupees per kilogram to eighty-four

Rupees per kilogram.   Pls.’ Mem. 11 (citing Respondents’ Second

Surrogate Value Submission (Jan 8, 2005), Pub. Doc. 257, Ex. 1).

Plaintiffs argue that Commerce’s failure to consider this and

other record evidence renders its determination unacceptably
Court No. 05-00439                                        Page 9

flawed.

     Defendant maintains that “Commerce did not base its

valuation of honey solely upon the first half of the [POR], prior

to the second half decline in prices, but rather, did take price

decline into consideration.”    Def.’s Opp’n 17 (internal quotation

marks, citation & ellipsis omitted).    As evidence that Commerce

considered the price decline, defendant points to Attachment 1 to

Commerce’s Final FOP Memorandum.    Def.’s Mem. 16.

     Plaintiffs respond that “[t]he Government’s characterization

of the Department’s analysis is simply wrong.”    Pls.’ Reply 7.

Plaintiffs maintain that Attachment 1 to the Final FOP Memorandum

contained prices taken from the EDA Data for the first half of

the POR only, i.e., from December 2002 to June 2003, “which

steadily increased from 62 Rs/kg in December 2002 - January 2003,

to 73 Rs/kg in March - April 2003, to 87 Rs/kg in May - June

2003.”    Pls.’ Reply 7-8.   To determine the value of honey for the

second half of the POR, however, Commerce used data solely from

the month of October, and then adjusted it for inflation.

Plaintiffs assert that Commerce took a price for honey from

October 2002, “which the Department inflated to reflect a change

in India’s [wholesale price index, or “WPI”], without taking into

consideration the evidence that honey prices in India had

declined during the second half of 2003.”    Pls.’ Reply 8.

     An examination of the record leads the court to find that
Court No. 05-00439                                        Page 10

Commerce did not adequately explain how it took into

consideration evidence of a decline in prices during the second

half of the POR.   There appears to be no dispute that a decline

in the price of raw honey took place during that period.     See

Pls.’ Mem. 10; Def.’s Opp’n 16.    In the Final FOP Memorandum,

however, Commerce indicated that it calculated a surrogate value

for raw honey by taking a “weighted average of the price for each

month from December 2002 through June 2003 based on the

percentage of each type of honey produced and sold.”    Final FOP

Mem. at 2.   For the second half of the POR, it took the value

reported in only one month, i.e., October 2002 (60 Rupees per

kilogram) and adjusted it upward to take account of inflation.

The result was a price of 61.93 Rupees per kilogram.    Final FOP

Mem., Attach. I.

     Commerce has not explained how inflating the price of raw

honey takes into consideration the record evidence showing raw

honey prices declined in the second half of the POR.    “An agency

must explain its rationale . . . such that a court may follow and

review its line of analysis, its reasonable assumptions, and

other relevant considerations.    Explanation is necessary . . .

for this court to perform its statutory review function.”     Int’l

Imaging Materials, Inc. v. United States Int’l Trade Comm’n, 30

CIT __, Slip Op. 06-11 at 13 (Jan. 23, 2006) (not published in

the Federal Supplement) (internal alteration, quotation marks &
Court No. 05-00439                                        Page 11

citations omitted); see also Tourus Records, Inc. v. DEA, 259

F.3d 731, 737 (D.D.C. Cir. 2001) (“A fundamental requirement of

administrative law is that an agency set forth its reasons for

decision.”) (internal quotation marks omitted).   On remand,

Commerce shall either (1) address the evidence cited by

plaintiffs and explain whether and how the observed decline in

prices during the second half of the POR is reflected in its

calculation of the value of raw honey; or (2) recalculate the

value to reflect a reasonable interpretation of the record

evidence concerning the decline.



     B.   Surrogate Financial Ratios: Choice of Data Source

     Next, plaintiffs claim that by declining to use the

financial statement of Apis (India) Natural Products (“Apis”)

Commerce rendered the Final Results unsupported by substantial

evidence and not in accordance with law.   Pls.’ Mem. 16-17.   This

issue was also addressed in Wuhan I, where the court sustained,

as reasonable, Commerce’s decision to rely on Mahabaleshwar Honey

Producers Cooperative Society, Ltd.’s (“MHPC”) financial

statement instead of Apis’s financials:

          The court finds that Commerce was justified
          in determining that the 2003-2004 MHPC
          financial statement was the best available
          information to value factory overhead, SG&A
          expenses and profit. It is apparent from the
          Final Results that Commerce examined both the
          MHPC and Apis financial statements and
          compared their quality, specificity and
Court No. 05-00439                                          Page 12

            contemporaneity. It then concluded based on
            this examination that “the Apis financial
            statement . . . is not a reliable source for
            calculating the surrogate financial ratios
            because it is neither complete, nor
            sufficiently detailed to provide a reliable
            source for surrogate values.” As Commerce
            observed, “the Apis statement does not
            include any auditor notes, nor does it appear
            to include complete schedules or details on
            Apis’ operations.” The MHPC’s statement, on
            the other hand, “include[s] a complete annual
            report, an auditors report, and complete
            profit and loss and business statements that
            segregate MHPC’s honey and fruit canning
            businesses.” Unlike Apis’s statement, MHPC’s
            statement details its honey operations with
            both narrative text and schedules indicating,
            for example, the number of kilograms of honey
            produced by particular MHPC members and the
            price per kilogram. The court thus finds
            that Commerce’s determination that the MHPC
            financial statement was the best available
            information to value financial ratios was
            reasonable.

Wuhan I, 31 CIT at __, Slip Op. 07-113 at 47-48 (citations

omitted).    To the extent plaintiffs’ arguments are identical to

those found in Wuhan I, the court follows its holding in that

case that the MHPC financial statement constitutes the best

available information.    See 19 U.S.C. § 1677b(c)(1) (surrogate

values “shall be based on the best available information . . . in

a market economy country or countries considered to be

appropriate by the administering authority”); see also Nation

Ford Chem. Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir.

1999).

     In addition to those arguments, plaintiffs also claim that
Court No. 05-00439                                         Page 13

Commerce ignored evidence that: (1) the MHPC financial statement

was “distorted by non-market forces” because “MHPC is a

cooperative which does not operate as a true market entity”; and

(2) the MHPC financial statement is distorted by the production

of non-subject merchandise.   Pls.’ Mem. 24-25.   With respect to

the latter argument, plaintiffs claim that “MHPC’s fruit canning

division . . . affect[ed] the cooperative’s financial

performance, skewing the factory overhead and SG&A ratios.”

Pls.’ Mem. 25.

     Neither of these arguments persuades the court that remand

is necessary.    First, the Final Results demonstrate that Commerce

took into consideration MHPC’s status as a cooperative when

making its determination that its financial statement was more

reliable than Apis’s financial statement.   In particular,

Commerce stated:

          [W]ith respect to respondents’ assertion that
          MHPC does not operate as a true market entity
          because it is a cooperative, we disagree.
          Other than to note that loans to its members
          are not always repaid on time, which is not
          unusual in that many companies have
          provisions for bad loans, respondents have
          not cited evidence that supports their claim
          that MHPC’s results are distorted by non-
          market forces.

Issues & Dec. Mem. at 19.   An examination of the record

demonstrates that, other than certain unpaid loans, plaintiffs

can rely on no record evidence to support their claim.     Rather,

they rely on generalized statements.    See Pls.’ Mem. 24-25 n.15
Court No. 05-00439                                        Page 14

(“Companies generally loan money to vendors for business

purposes; they do not make personal loans to members.    MHPC’s

unpaid loans to its members affect MHPC financial statements,

which in turn skew the ratios calculated by the Department.      This

is direct evidence that the cooperative nature of MHPC distorts

its financial results.”).   Without supporting with record

evidence their claim that unpaid, personal loans made by MHPC to

its members actually affected MHPC’s financial statement,

plaintiffs’ generalized statement does not undermine Commerce’s

finding that MHPC’s status as a cooperative did not render its

financial statement unreliable.

     Plaintiffs’ second claim also fails to demonstrate that

Commerce ignored evidence that the MHPC financial statement was

distorted by its fruit canning division.     Plaintiffs insist that

“[t]here is not a clear division of costs between MHPC’s honey

and fruit canning operations in some of the schedules used by the

Department,” and that some expenses included in the Department’s

calculations, such as bank interest, travel expenses and building

depreciation, “include[d] expenses for both the honey and the

fruit canning divisions.”   Pls.’ Mem. 25.   Having considered

plaintiffs’ arguments at the administrative level, Commerce found

that MHPC’s financial statement sufficiently separated data

regarding its fruit canning and honey production divisions such

that Commerce could use the data on honey production to derive
Court No. 05-00439                                        Page 15

surrogate financial ratios.   Specifically, Commerce found that

(1) “MHPC’s financial statements are narrowly tailored to subject

merchandise”; (2) “the total asset value of non-subject

operations accounts for only 16.71 percent of MHPC’s total asset

value”; and (3) “the Department has calculated a profit only from

the honey processing division.”   Issues & Dec. Mem. at 18-19.

     Thus, while acknowledging that MHPC produced non-subject

merchandise in addition to the subject honey, Commerce found that

MHPC’s financial statement sufficiently distinguished the costs

associated with the honey and fruit canning divisions such that

Commerce could derive surrogate financial ratios based solely on

honey data.   Indeed, a review of the MHPC financial statement

reveals that it contains separate tables pertaining to each

division, e.g., the “Fruit canning profit and loss statement” and

the “Fruit canning business statement.”   Final FOP Mem., Attach.

II (MHPC financial statement) at 16 & 17.   In addition, the “Main

Journal Business Statement” specifically pertains to honey sale

and collection.   See Final FOR Mem., Attach. II ( MHPC financial

statement) at 15 (listing, inter alia, line items for “Honey

Sale,” “honey collection,” “Honey boxes Sale,” “Honey machine

Sale,” “honey collection (extracted)”).   As with its claim with

respect to MHPC’s status as a cooperative, plaintiffs have made

observations but have not demonstrated that Commerce was unable

to use the entries on MHPC’s financial statement so as to create
Court No. 05-00439                                       Page 16

an accurate picture of its honey business.

     This Court has held that “[w]here there exist[] on the

record ‘alternative sources of data that would be equally or more

reliable . . . it is within Commerce’s discretion to use either

set of data.’”    Wuhan Bee Healthy Co. v. United States, 29 CIT

__, __, 374 F. Supp. 2d 1299, 1304 (2005) (quoting Geum Poong

Corp. v. United States, 26 CIT 322, 326, 193 F. Supp. 2d 1363,

1369 (2002)).    Contrary to plaintiffs’ arguments, Commerce did

not fail to consider either MHPC’s status as a cooperative or its

production of non-subject merchandise.    In addition, plaintiffs

have failed to point to record evidence that the MHPC did not

“operate as a true market entity.”    Issues & Dec. Mem. at 19.

Plaintiffs have thus failed to make the case that the Apis

financial statement is more reliable than the MHPC financial

statement.   In light of the foregoing, plaintiffs have failed to

establish that (1) the MHPC financial statement was unreliable,

either because the organization was a cooperative or because MHPC

produced non-subject merchandise, or that (2) the Apis financial

statement was more reliable than the MHPC financial statement.

Therefore, having considered Apis’s financials, MHPC’s financials

and Commerce’s finding that MHPC’s financials were more reliable

than Apis’s, which was sustained in Wuhan I, the court sustains

Commerce’s choice to rely on the MHPC financial statement.
Court No. 05-00439                                        Page 17

     C.     Surrogate Financial Ratios: Calculation of Ratios

     Next, plaintiffs challenge (1) Commerce’s failure to deduct

honey sales commissions from its calculation of SG&A; and (2)

Commerce’s failure to treat MHPC’s expenses for jars, corks and

honey machine purchases as direct raw materials.



            (1) Honey Sales Commissions

     In a market economy proceeding, Commerce is required to make

a “circumstances-of-sale” adjustment to (A) either export price

or constructed export price; and (B) normal value to account for

differences in direct selling expenses incurred in the U.S. and

foreign markets.     See 19 U.S.C. §§ 1677a(d)(1)(A) (providing for

the reduction in the price used to establish constructed export

price by the amount of any commissions for selling the subject

merchandise in the United States), 1677b(a)(6)(C)(iii) (providing

for adjustment to normal value for differences in circumstances

of sale).    Under Commerce’s regulations, “direct selling

expenses” include “commissions . . . that result from, and bear a

direct relationship to, the particular sale in question.”    19

C.F.R. § 351.410(c) (2005).    The purpose of the adjustment is to

ensure that export price and normal value are being compared on

an “equivalent basis” when Commerce makes its dumping

determination.     See Antidumping Manual, Ch. 8 at 16.

     In an NME proceeding, on the other hand, “Commerce maintains
Court No. 05-00439                                        Page 18

an established practice of not making circumstances-of-sale

adjustments in NME cases.”   Shandong Huarong Mach. Co. v. United

States, 30 CIT __, __, 435 F. Supp. 2d 1261, 1293 (2006).

Instead, Commerce “includes all standard selling expenses,” which

Commerce has determined encompass sales commissions, in the SG&A

calculation.   Issues & Dec. Mem. at 22; see also Tapered Roller

Bearings and Parts Thereof, Finished and Unfinished, From the

PRC, 63 Fed. Reg. 63,842, 63,852-53 (Dep’t of Commerce Nov. 17,

1998) (final results) (“[Commissions are] standard selling costs

and, as such, are properly categorized under SG&A.”).   In the

Final Results, Commerce explained its practice of treating sales

commissions differently in market economy and NME proceedings:

          [I]t is not possible to deconstruct surrogate
          financial ratios at the level of detail that
          would be necessary to make [circumstances-of-
          sale] adjustments, because it is not known
          whether there is an exact correlation between
          the NME producer’s and the surrogate
          producer’s expenses. Therefore, “the
          Department normally bases normal value . . .
          on factor values from a surrogate country on
          the premise that the actual experience in the
          NME cannot meaningfully be considered.”

Issues & Dec. Mem. at 22 (quoting Tapered Roller Bearings and

Parts Thereof, Finished or Unfinished, From the Republic of

Romania, 61 Fed. Reg. 51,427, 51,429 (Dep’t of Commerce Oct. 2,

1996) (final results)).   Accordingly, in the Final Results,

Commerce found that honey sales commissions should be included in

the calculation of the surrogate SG&A ratio as standard selling
Court No. 05-00439                                          Page 19

expenses.    Id.

     Plaintiffs insist that Commerce’s practice of not deducting

commissions from SG&A in the NME context results in an inaccurate

dumping margin because commissions were deducted from the U.S.

price.8   Pl.’s Mem. 28-29.   They take the position that market

economy cases and NME cases should be treated similarly with

respect to the deduction of commissions:

            Insofar as the Department’s calculation of
            normal value [in the NME context] is intended
            to achieve the same, reasonable, “apples to
            apples,” no-double counting results,
            [Commerce] is required to apply the same
            basic rules in NME cases as it does when
            adjusting [export price/constructed export
            price] and [constructed value] for
            commissions in market economy proceedings.

Pls.’ Mem. 28-29 (citing Hebei Metals & Minerals Imp. & Exp.

Corp. v. United States, 28 CIT __, Slip Op. 04-88 (July 19, 2004)

(not reported in the Federal Supplement)).    Plaintiffs insist

that “in this case it is possible to make the adjustment because

there is one adjustment at issue.    Moreover, . . . there is an

exact correlation between the NME producer and the surrogate

producer expense, namely the commission on honey sales expense.”



     8
          The “U.S. price” can be either the export price or the
constructed export price. “When an arm’s-length transaction
takes place between a foreign producer and an independent
importer, U.S. price is calculated using the statutory Export
Price (EP) provision; [constructed export price] is used when the
foreign producer and the importer are affiliated.” Mittal Steel
Point Lisas Ltd. v. United States, 491 F. Supp. 2d 1222, 1226
(2007).
Court No. 05-00439                                         Page 20

Pls.’ Mem. 30.    In other words, plaintiffs contend that because

plaintiffs Shanghai Eswell and Zhejiang incurred selling

commission expenses in the sale of honey, there is an “exact

correlation” between these expenses and those incurred by the

surrogate MHPC.    See Respondents’ Comments on the Application of

Surrogate Ratios (Dec. 3, 2004), Pub. Doc. 223, at 2; Shanghai

Eswell’s Sec. C Questionnaire Resp. (Mar. 25, 2004), Conf. Doc.

17, at 24-26 & Ex. 1 (indicating commission expenses); Zhejiang

Sec. C Questionnaire Resp. (Mar. 25, 2004), Conf. Doc. 11, at 24

& Ex. 1 (same); Final FOP Mem., Attach. II (MHPC financial

statement) at 15 (indicating “honey sale commission” under

“Purchase” column).

     The court finds remand appropriate here so that Commerce may

explain in more detail its decision not to deduct commissions

from the SG&A ratio.    In Shandong Huarong Machinery Co., Commerce

refrained from making a circumstances-of-sale adjustment to

account for commissions that an NME producer paid, citing its

practice not to do so in the NME context.    There, the Court found

Commerce’s explanation insufficient and remanded the matter to

Commerce:

            [I]t is apparent that Commerce’s past
            practice to refrain from making
            circumstances-of-sale adjustments in NME
            situations is based on its conclusion that,
            in most such cases, there is not enough
            information on the record to make a
            determination based on substantial evidence.
            While this may be true in most cases, the
Court No. 05-00439                                        Page 21

          court observes that Commerce does not cite
          any evidentiary basis for its determination
          in this case, other than its past practice.
          For that reason, the court remands this issue
          to Commerce to allow the agency to further
          explain its determination that the record
          here was devoid of substantial evidence to
          permit a circumstances-of-sale adjustment.

Shandong Huarong Mach. Co., 30 CIT at __, 435 F. Supp. 2d at

1293.   As in Shandong Huarong Machinery Co., Commerce did not

cite any evidentiary basis in the Final Results for its

determination not to deduct sales commissions.    Rather, the

Department relied on its past practice based on the general

notion that in NME cases the record does not contain sufficient

information to determine whether there is “an exact correlation

between the NME producer’s and the surrogate producer’s

expenses.”   Issues & Dec. Mem. at 22.   Plaintiffs insist that

there is sufficient evidence of an exact correlation, namely the

record evidence showing that Shanghai Eswell, Zhejiang and MHPC

incurred selling commission expenses, and that Commerce deducted

selling commissions from Shanghai Eswell’s and Zhejiang’s U.S.

price calculations.   Because the Department did not discuss this

evidence, its determination is wanting.    See Int’l Imaging

Materials, Inc., 30 CIT at __, Slip Op. 06-11 at 13.     The court

therefore remands this matter to allow Commerce to further

explain its determination that the record evidence was

insufficient to permit a circumstances-of-sale adjustment, or to

make a circumstances-of-sale adjustment.
Court No. 05-00439                                        Page 22

          (2) Jars, Corks and Honey Machine Purchases

     Plaintiffs next take issue with Commerce’s failure to

include MHPC’s expenses for jars, corks and honey machines in its

financial ratio calculation as direct expenses used for producing

finished honey.   In the Final Results, Commerce supported its

decision not to include jars, corks and honey machines by

pointing to that portion of the MHPC financial statement where

those items “appear separately in both the ‘Sales’ and ‘Purchase’

columns, independent of the ‘Honey Collection’ and ‘Honey Sale’

line items . . . .”   Issues & Dec. Mem. at 23.   For Commerce,

these entries supported the conclusion that expenses for jars,

corks or honey machines were independent from honey production

and thus were not part of MHPC’s finished product.    Therefore,

Commerce concluded that it “[would] not adjust the surrogate

revenue and will not adjust the [materials, labor and energy]

denominator to include the expenses for ‘jars and corks’ or honey

machines.”   Issues & Dec. Mem. at 23.

     Plaintiffs argue that the exclusion of expenses for jars,

corks and honey machines from Commerce’s financial calculation is

not supported by record evidence.   They contend that, because the

MHPC financial statement shows that MHPC purchased different size

jars and corks, “the only reasonable explanation is that MHPC

sells its honey in jars [with] corks.”   Pls.’ Mem. 32.   Because

honey is “sold retail in different size jars, these jars and
Court No. 05-00439                                        Page 23

corks costs should be treated as direct raw materials.”    Pls.’

Mem. 32.    In addition, plaintiffs note that “[h]oney machines

process the honey for sale and are a vital part of the direct

materials.”    GDLSK 2nd Refiling of Admin. Case Br. (May 10,

2005), Conf. Doc. 108, at 33.

     Plaintiffs further contend that Commerce erred by failing to

deduct an amount for jars and corks from the net revenue.       “Given

that the starting figure to calculate profit encompasses the sale

of retail honey in jars,” plaintiffs argue, “the only way for the

Department to calculate an accurate profit is by deducting all

costs from the revenue, including the costs for jars and corks.”

Pls.’ Mem. 33 (emphasis in original).

     Defendant argues that Commerce’s determination that

“expenses for jars, corks, and honey machines were not direct

expenses is supported by substantial evidence . . . .”    Def.’s

Opp’n 33.    Defendant contends, as Commerce did in the Final

Results, that because jars, corks and honey machines are listed

separately from expenses associated with honey production in the

MHPC financial statement these items were being bought and sold

but could not be tied to the production of finished honey.      Thus,

defendant argues that “without supporting evidence that the items

were associated with or incorporated into the sale of subject

merchandise, Commerce determined that it would not adjust the

surrogate revenue or the denominator of the financial ratio
Court No. 05-00439                                       Page 24

calculation to include expenses for jars and corks.”   Def.’s

Opp’n 34.

     The court remands for further explanation Commerce’s finding

that jars, corks and honey machines were not direct materials in

the production of finished honey.   In the Final Results, Commerce

insists that it must “treat the financial statement line items as

they have been reported in the MHPC financial statement—

independent of sales and packaging.”9   Issues & Dec. Mem. at 23.

The court has reviewed the chart on page 15 of the MHPC financial

statement, which contains the line items referenced by Commerce.

First, the court observes, as noted supra, that the chart

specifically pertains to honey sale and collection.    See Final

FOP Mem., Attach. II (MHPC financial statement) at 15.   Next, the

court notes that the chart contains line items for 250 gram, 500

gram and 1 kilogram jars; 53 millimeter and 38 millimeter corks;

and honey machines in both the “Sale” column and the “Purchase”

column.10   The line item for 100 gram jars appears only in the


     9
          Contrary to Commerce’s statement, the chart does not
contain a line item for “packaging,” but only “packing.”
“Packaging” means “to present (as a product) in such a way as to
heighten its appeal to the public,” while “packing” means
“material (as a covering or stuffing) used to protect packed
goods (as for shipping).” Merriam-Webster Online Dictionary,
available at http://www.merriam-webster.com/. Thus, while the
line items for jars and corks may understandably be set apart
from “packing,” they may appropriately be considered “packaging,”
i.e., the presentation of the finished product to the public.
     10
            The MHPC financial statement indicates prices next to
                                                     (continued...)
Court No. 05-00439                                         Page 25

“Sale” column.    The chart is therefore ambiguous.    While it is

possible that MHPC buys and sells jars and corks that are either

empty or filled with something other than honey, there is no

evidence in the MHPC financial statement tending to support such

a conclusion.    Without further explanation the court cannot

accept as adequate Commerce’s reliance solely on the line items

for jars and corks being separate from other line items, to

support its conclusion that they are not direct materials

associated with finished honey.

     With respect to the purchase of honey machines, defendant’s

assertion that “honey machines are a productive asset, not a

direct expense, for which Commerce would calculate depreciation,”

Def.’s Mem. 34, is raised for the first time in its papers before

this court and cannot take the place of Commerce’s own reasoning

on this issue in the Final Results.    See Burlington Truck Lines,

     10
      (...continued)
the line items for jars, corks and honey machines:

      Sale                  Rs.          Purchase           Rs.
honey machines         3,960.00       honey machines    3,960.00
100 gm. jars stock     25,296.00      None
250 gm. jars stock     122,121.00     250 gm. jars      120,159.00
500 gm. jars stock     132,436.00     500 gm. jars      139,625.00
1 kg. jars stock       95,004.00      1 kg. jars         89,270.00
53 mm. corks stock     110,548.75     53 mm. corks      68,064.00
38 mm. corks stock     8,433.60       38 mm. corks      14,078.00
Court No. 05-00439                                        Page 26

Inc. v. United States, 371 U.S. 156, 168-69 (1962) (“The courts

may not accept appellate counsel’s post hoc rationalizations for

agency action . . . .   For the courts to substitute their or

counsel’s discretion for that of the [agency] is incompatible

with the orderly functioning of the process of judicial review.”)

(internal quotation & citation omitted).   Therefore, on remand,

Commerce shall explain, with specific reference to the questions

raised in this opinion, its decision not to include expenses for

jars, corks and honey machines in its financial ratio calculation

as direct expenses used for producing finished honey.



II.   Commerce’s Decision to Use Export Price for Jinfu PRC’s U.S.
      Sales

      In the Final Results, Commerce found that Jinfu PRC and

Jinfu Trading (U.S.A.) Co., Ltd. (“Jinfu USA”) were not

“affiliated,” within the meaning of 19 U.S.C. § 1677(33)(F),11


      11
           In pertinent part, the statute provides:

           The following persons shall be considered
           “affiliated” or “affiliated persons”: . . .

                (F) Two or more persons directly or
                indirectly controlling, controlled
                by, or under common control with,
                any person. . . .

           For purposes of this paragraph, a person
           shall be considered to control another person
           if the person is legally or operationally in
           a position to exercise restraint or direction
           over the other person.
                                                    (continued...)
Court No. 05-00439                                        Page 27

prior to October 25, 2003.12   Issues & Dec. Mem. at 45.13   As a

result, Commerce “treated any sales made between Jinfu PRC and

Jinfu USA prior to October 25, 2003, on an [export price] basis,

while all sales made after this date have been treated as

[constructed export price] sales.”    Id.   Plaintiff Jinfu PRC

disputes Commerce’s finding that Jinfu PRC and Jinfu USA were not

affiliated prior to October 25, 2003.    Again, the facts pertinent

to this issue are familiar to the court.    Commerce’s finding of

no affiliation with respect to Jinfu PRC is presently the subject



     11
      (...continued)
19 U.S.C. § 1677(33)(F).
     12
          Jinfu USA is the successor company to Yousheng Trading
(U.S.A.) Co., Ltd. (“Yousheng USA”), an import company to which
Jinfu PRC sold its honey during the POR. See Second Supplemental
Questionnaire Resp. of Jinfu PRC, Conf. Doc. 71, Ex. 4(16)
(indicating that on November 8, 2002, Yousheng USA filed an
amendment to its articles of incorporation with the State of
Washington to change its name to Jinfu Trading (U.S.A.) Co.,
Ltd.).
     13
          Commerce’s affiliation finding is the subject of Jinfu
Trading Co. v. United States, Court No. 04-00597, which is
pending before the court. For purposes of confidentiality, the
court will employ the same shorthand references it used in Jinfu
Trading Co. v. United States, 30 CIT __, Slip Op. 06-137 (Sept.
7, 2006) (not reported in the Federal Supplement) (“Jinfu I”) and
Jinfu Trading Co. v. United States, 31 CIT __, Slip Op. 07-95
(June 13, 2007) (not reported in the Federal Supplement) (“Jinfu
II”). Specifically, Jinfu USA’s sole employee [[              ]]
is referred to as “Mr. A”; [[              ]], the chairman and
CEO of Jinfu PRC as “CEO B”; [[               ]], the
unaffiliated U.S. buyer as “Customer C”; and [[
]], the original owner of what was then Yousheng USA as “Mr. D.”
The attorney retained in October 2002 to aid in the attempted
transfer of ownership of Yousheng USA to CEO B is referred to as
“Attorney E.”
Court No. 05-00439                                      Page 28

of Jinfu Trading Co. v. United States, Court No. 04-00597,

familiarity with which is presumed.14   In that case, Jinfu PRC

challenges Commerce’s rescission of its new shipper review based

on the conclusion that Jinfu PRC was not affiliated with either

Jinfu USA or its predecessor Yousheng Trading (U.S.A.) Co., Ltd.

(“Yousheng USA”), within the meaning of 19 U.S.C. § 1677(33)(F)

or (G).   See Honey from the PRC, 69 Fed. Reg. 64,029 (Dep’t of

Commerce Nov. 3, 2004).   In Jinfu Trading Co. v. United States,

30 CIT __, Slip Op. 06-137 (Sept. 7, 2006) (not reported in the

Federal Supplement) (“Jinfu I”) and Jinfu Trading Co. v. United

States, 31 CIT __, Slip Op. 07-95 (June 13, 2007) (not reported

in the Federal Supplement) (“Jinfu II”), the court remanded

Commerce’s decision to rescind Jinfu PRC’s new shipper review.

See Jinfu I, 30 CIT at __, Slip Op. 06-137 at 32; Jinfu II, 31

CIT at __, Slip Op. 07-95 at 24.   To the extent the issues

presented in this review are identical to those addressed in

Jinfu I and Jinfu II, the court follows its previous reasoning

and directs the same result.

     14
          Plaintiffs contend that the affiliation finding they
challenge here, i.e., Commerce’s finding that Jinfu PRC was not
affiliated with either Yousheng USA or Jinfu USA, is the same
finding that formed the basis of Commerce’s decision to rescind
the new shipper review. See Pls.’ Mem. 33 n.19 (“The
Department’s affiliation determination . . . subject to this
Civil Action is a sequel to its Final Determination . . . to
rescind Jinfu’s New Shipper Review . . . for the period December
1, 2002 through May 31, 2003. This rescission determination was
based on the same ‘no affiliation’ subsidiary determination which
is the subject of the instant Civil Action.”).
Court No. 05-00439                                        Page 29

     A.   Affiliation: Ownership Interest

     Here, as in Jinfu I, plaintiffs argue that Commerce was

unreasonable in finding that Jinfu PRC and Jinfu USA were not

affiliated because Jinfu PRC owned Jinfu USA starting in October

2002, i.e., a year prior to the execution of the October 25, 2003

ownership transfer agreement between Jinfu PRC’s CEO and Jinfu

USA’s owner.   Pls.’ Mem. 36 (“[E]ffective October 25, 2002, [CEO

B] acted as if he owned and controlled Jinfu USA.”).   Having

reviewed the evidence and arguments presented here, the court

finds, as it did in Jinfu I, that Commerce’s conclusion that

ownership did not transfer to CEO B prior to October 25, 2003,

the date of the ownership transfer agreement between CEO B and

Mr. D, is supported by record evidence:

          By [the ownership transfer agreement’s]
          terms, the document provides that: “THIS
          CERTIFICATE TRANSFER IS EFFECTIVE UPON
          EXECUTION BY THE UNDERSIGNED.” It is clear,
          therefore, that the Certificate of Transfer
          of Shares was not to gain legal effect unless
          and until the parties signed it.

Jinfu I, 30 CIT at __, Slip Op. 06-137 at 23.   The earliest

possible effective date of the ownership transfer agreement would

be October 25, 2003.15   As a result, the court finds, as it did

in Jinfu I, that it “cannot find as unsupported by substantial


     15
          The document is dated October 25, 2003, but it was
apparently signed in December of 2003. See Issues & Dec. Mem. at
39 (“Although the purchase of Jinfu USA by [CEO B] occurred some
time in December 2003, the parties involved backdated the CTS for
that transaction to October 25, 2003.”).
Court No. 05-00439                                       Page 30

evidence Commerce’s determination that CEO B did not have sole

ownership of either Yousheng USA or Jinfu USA” prior to October

25, 2003.    Jinfu I, 30 CIT at __, Slip Op. 06-137 at 25.



     B.     Affiliation: Control

     Next, plaintiffs claim that Jinfu PRC controlled Jinfu USA’s

pricing decisions.    This Court has held that Commerce is required

to find affiliation where the party alleging affiliation has

demonstrated that “[t]wo or more entities . . . share various

control relationships whereby one entity is legally or

operationally in a position to exercise restraint or direction

over the other and that such relationship provides one entity the

significant potential for the manipulation of price or production

of the other.”    Hontex Enters., Inc. v. United States, 29 CIT __,

__, 387 F. Supp. 2d 1353, 1358 (2005) (internal quotation marks &

citations omitted); see also 19 U.S.C. § 1677(33) (“[A] person

shall be considered to control another person if the person is

legally or operationally in a position to exercise restraint or

direction over the other person.”); 19 C.F.R. § 351.102(b)

(finding of control requires that “the relationship has the

potential to impact decisions concerning the production, pricing,

or cost of the subject merchandise or foreign like product”).

     In Jinfu I, the court agreed with plaintiffs’ claim that the

record evidence indicated that Jinfu PRC controlled Jinfu USA’s
Court No. 05-00439                                        Page 31

pricing decisions and found that “Commerce unreasonably concluded

that [Jinfu PRC and Jinfu USA] were not affiliated.”     Jinfu I, 30

CIT at __, Slip Op. 06-137 at 28.   The court examined the

verification report, which plaintiffs cite here as evidence to

support its argument that CEO B had operational control of Jinfu

USA, as well as correspondence between CEO B and Mr. A and found:

          [I]n the [verification] report, Mr. A
          explains that for transactions where he
          resells honey originally purchased from Jinfu
          PRC, he takes the following steps:

               (1) negotiate material terms of
               sale with U.S. customer; (2) enter
               a non-binding sales contract with
               the U.S. customer; (3) purchase
               merchandise from Jinfu in the PRC;
               (4) inform [CEO B] by telephone of
               finalized . . . material terms of
               sale and fax him a copy of the
               sales contract; (5) receive bill of
               lading, which includes on-board
               date of the merchandise; (6)
               receive shipping notification of
               estimated arrival date; (7) prepare
               sales invoices for estimated
               arrival date; and (8) issue invoice
               to the U.S. customer once the
               merchandise has cleared FDA.

          For the sale in question, Mr. A stated that:

               Subsequent to his negotiations with
               [Customer C], . . . [Mr. A] faxed a
               letter to [CEO B] relaying the
               result of his negotiations . . .
               and U.S. honey market research.
               . . . In a reply fax, [CEO B]
               agreed that the sale with [Customer
               C] was a good opportunity for Jinfu
               USA and that the negotiated price
               was reasonable. As such, . . .
               [Mr. A] entered into a sales
Court No. 05-00439                                      Page 32

               contract with [Customer C] . . . .

          As a result, the fax sent by Mr. A to CEO B
          on November 13, 2002, read as follows:

               Firstly, I would like to report you
               that the current market price of
               honey in the United States is
               between [[      ]] and [[       ]]
               per pound. Because of the sharp
               reduction of the export of honey
               from other countries, the domestic
               sales and price of honey in the
               United States is very promising.

               I contacted a US local client who
               was willing to order a container of
               honey at the ex-warehouse price of
               [[       ]] USD per ton on the
               condition that it can pass the
               examination of US customs and FDA.
               Since the annual purchasing amount
               of this client is relatively
               significant, if a good relationship
               can be established with this
               client, it will be of great help to
               our company’s sales to the US.
               Please let me know you[r] opinion
               and advise me further.

          CEO B sent a reply fax on the same day
          stating that:

               We received you[r] letter and felt
               happy that there are clients are
               [sic] interested in the honey
               product of our company. You did a
               good job on the report of the US
               market. We finished a
               container . . . on November 5.

               In order to open the US market and
               better understand the marketing
               information, I agree with you. We
               accept the client’s quotation of [[
                     ]] USD per ton as ex-
               warehouse price on the condition
               that it passes the examination of
Court No. 05-00439                                        Page 33

               the US customs and FDA. Please
               make the preparation and keep in
               touch with the client for purpose
               of long term cooperation. I hereby
               authorize you to sign contract with
               the client.

Id. at __, Slip Op. 06-137 at 28-30 (footnote omitted).    Thus,

the court concluded that the record evidence tended to support

the conclusion that CEO B had operational control of Jinfu USA

and exercised that control with respect to pricing decisions at

the time of the claimed new shipper sale (November 2, 2002).    The

court thus remanded the matter to Commerce.    Id. at __, Slip Op.

06-137 at 28, 32; see TIJID, Inc. v. United States, 29 CIT __,

__, 366 F. Supp. 2d 1286, 1293 (2005).

     On remand, Commerce continued to find that Jinfu PRC was not

affiliated with Jinfu USA or its predecessor Yousheng USA, at the

relevant time, largely because it found the faxes exchanged

between Mr. A and CEO B to be incredible.     Jinfu II, 31 CIT at

__, Slip Op. 07-95 at 21.    In addition, Commerce maintained that

“even if considered credible or reliable, [the faxes] merely

indicate that Mr. A found a customer willing to pay X price per

[metric ton] for the honey and that CEO B agreed to this price.”

Id., Slip Op. 07-95 at 21.   The Jinfu II Court found Commerce’s

analysis wanting:

          Commerce has not articulated a rational
          connection between its conclusion that CEO B
          did not control Jinfu USA’s pricing decisions
          and its statement that the faxes, if valid,
          would not evidence control. Of particular
Court No. 05-00439                                          Page 34

            concern is Commerce’s failure to expressly
            state why CEO B’s approval of the sales price
            and authorization to execute the contract do
            not evidence control.

Id. at __, Slip Op. 07-95 at 22.    The Court remanded the matter

to Commerce a second time and directed Commerce to explain “why

the contents of the faxes exchanged between Mr. A and CEO B, if

credible and reliable, do not support a conclusion that CEO B

controlled Jinfu USA,” and to “reopen the record to allow

plaintiff to put on the record new evidence regarding the

credibility and reliability of the faxes . . . .”    Id. at __,

Slip Op. 07-95 at 24.

     As in its prior decisions, the court remands this matter to

Commerce.    On remand, Commerce is directed to either find that

Jinfu PRC and Jinfu USA were affiliated prior to October 25,

2003, or to provide other record evidence to support its

conclusion that the companies were not affiliated.



                             CONCLUSION

     For the foregoing reasons, the court sustains the Final

Results in part and remands for further action consistent with

this opinion.    Remand results are due on December 13, 2007.

Comments to the remand results are due on January 14, 2008.
Court No. 05-00439                                      Page 35

Replies to such comments are due on January 25, 2008.




                                         /s/ Richard K. Eaton
                                             Richard K. Eaton


Dated:    September 13, 2007
          New York, New York
