Case: 19-1207    Document: 54     Page: 1   Filed: 02/10/2020




   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                  CP KELCO US, INC.,
                   Plaintiff-Appellant

                             v.

     UNITED STATES, NEIMENGGU FUFENG
    BIOTECHNOLOGIES CO., LTD., SHANDONG
       FUFENG FERMENTATION CO., LTD.,
              Defendants-Appellees
             ______________________

                        2019-1207
                  ______________________

    Appeal from the United States Court of International
 Trade in Nos. 1:13-cv-00288-RWG, 1:13-cv-00289-RWG,
 Senior Judge Richard W. Goldberg.
                 ______________________

                Decided: February 10, 2020
                 ______________________

     NANCY NOONAN, Arent Fox, LLP, Washington, DC, ar-
 gued for plaintiff-appellant. Also represented by MATTHEW
 L. KANNA, FRIEDERIKE GOERGENS.

     KELLY A. KRYSTYNIAK, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee United States.
 Also represented by JOSEPH H. HUNT, JEANNE DAVIDSON,
 PATRICIA M. MCCARTHY; BRANDON JERROLD CUSTARD, Of-
 fice of the Chief Counsel for Trade Enforcement and
Case: 19-1207    Document: 54     Page: 2    Filed: 02/10/2020




 2                         CP KELCO US, INC. v. UNITED STATES




 Compliance, United States Department of Commerce,
 Washington, DC.

     JORDAN CHARLES KAHN, Grunfeld, Desiderio, Lebowitz,
 Silverman & Klestadt LLP, Washington, DC, argued for
 defendants-appellees Neimenggu Fufeng Biotechnologies
 Co., Ltd., Shandong Fufeng Fermentation Co., Ltd. Also
 represented by DHARMENDRA NARAIN CHOUDHARY,
 BRANDON M. PETELIN, ANDREW THOMAS SCHUTZ; BRUCE M.
 MITCHELL, NED H. MARSHAK, New York, NY.
                 ______________________

     Before NEWMAN, MOORE, and CHEN, Circuit Judges.
 MOORE, Circuit Judge.
     CP Kelco U.S., Inc. appeals the decision of the United
 States Court of International Trade (Trade Court) uphold-
 ing the Department of Commerce’s treatment of Xan-
 thomonas Campestris (X. Campestris) as an asset rather
 than a direct material input, and Commerce’s decision to
 use the Thai Fermentation Industry Ltd. (Thai Fermenta-
 tion) financial statements to calculate surrogate financial
 ratios. For the reasons described below, we affirm the
 Trade Court’s decision to uphold Commerce’s treatment of
 X. Campestris as an asset. We reverse its decision regard-
 ing Commerce’s use of the Thai Fermentation financial
 statements to calculate surrogate financial ratios and rein-
 state Commerce’s determination to use the Ajinomoto
 (Thailand) Co., Ltd. (Thai Ajinomoto) financial statements.
                        BACKGROUND
     This appeal comes to us following a long and compli-
 cated procedural history, both at Commerce and the Trade
 Court. On June 5, 2012, CP Kelco filed a petition concern-
 ing imports of xanthan gum from the People’s Republic of
 China (PRC). On July 2, 2012, Commerce initiated an an-
 tidumping duty investigation of xanthan gum from the
 PRC for the period of investigation of October 1, 2011
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 CP KELCO US, INC. v. UNITED STATES                           3



 through March 31, 2012. Appellees Neimenggu Fufeng Bi-
 otechnologies Co., Ltd. and Shandong Fufeng Fermenta-
 tion Co., Ltd. (collectively, Fufeng) export xanthan gum
 from the PRC. 1
                 A. Commerce’s Determination
     On January 3, 2013, Commerce preliminarily deter-
 mined “that xanthan gum from the People’s Republic of
 China (PRC) is being, or is likely to be, sold in the United
 States at less than fair value (LTFV).” Commerce consid-
 ers the PRC to be a non-market economy (NME) country.
 For a NME country, Commerce must “determine the nor-
 mal value of the subject merchandise on the basis of the
 value of the factors of production utilized in producing the
 merchandise . . . . based on the best available information
 regarding the values of such factors in a market economy
 country . . . .” 19 U.S.C. § 1677b(c)(1). The normal value
 is calculated as “the price at which the foreign like product
 is first sold . . . in the exporting country.”             Id.
 § 1677b(a)(1)(B)(i). Commerce values factors of production
 by utilizing “prices or costs of factors of production” from a
 market economy country that is “at a level of economic de-
 velopment comparable to that of the nonmarket economy
 country” and is a “significant producer[] of comparable
 merchandise.” Id. § 1677b(c)(4). Commerce chose Thai-
 land as the primary surrogate country for the investigation
 because it “is economically comparable to the PRC and is a
 significant producer of comparable merchandise.” 2


     1   Commerce determined that Neimenggu Fufeng Bi-
 otechnologies Co., Ltd. and Deosen Biochemical Ltd. ex-
 ported the largest volume of xanthan gum from the PRC
 during the period of investigation. Deosen is not a party to
 this appeal.
     2   The comparable merchandise selected is monoso-
 dium glutamate (MSG) and l-lysine because, like xanthan
 gum, they are added to foods and have substantially
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 4                          CP KELCO US, INC. v. UNITED STATES




 Commerce used the audited financial statements of Thai
 Ajinomoto to value factory overhead, selling, general, and
 administrative expenses, and profit. Commerce prelimi-
 narily assessed an antidumping margin of 21.69 percent
 for Fufeng.
      In the Final Determination, Commerce concluded
 Fufeng was selling xanthan gum in the United States at
 less than fair value and assessed Fufeng a 12.90 percent
 dumping margin. Xanthan Gum from the People’s Republic
 of China, 78 Fed. Reg. 33,351 (Dep’t of Commerce June 4,
 2013) (final determ.), as amended, 78 Fed. Reg. 43,143
 (July 19, 2013) (amend. final determ.). As part of its de-
 termination, Commerce considered whether X. Campestris
 is (1) a direct material that should be valued as a factor of
 production or (2) was accounted for in the surrogate finan-
 cial ratios and therefore did not need to be valued sepa-
 rately as a direct material input. Commerce did not value
 X. Campestris as a factor of production, or a direct material
 input, because Fufeng’s costs associated with the mainte-
 nance and use of X. Campestris bacteria are similar to
 those of Thai Ajinomoto’s costs associated with maintain-
 ing the bacteria used to produce comparable merchandise
 (i.e. MSG and l-lysine). Commerce found that evidence on
 the record of the present investigation shows that (1)
 Fufeng and Deosen “acquired [their] [X. C]ampestris strain
 for payment-in-full long before the [period of investiga-
 tion],” (2) “the acquisitions included the right to further
 grow and exploit the resulting bacteria for the production
 of xanthan gum,” and (3) Fufeng and Deosen continually
 regenerate the bacteria for use in their xanthan gum pro-
 duction. Due to their “ownership and regenerative use of




 similar production processes based on bacteria fermenta-
 tion. Therefore, the manufacturing facilities, materials,
 and energy amounts required for production are similar.
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 CP KELCO US, INC. v. UNITED STATES                           5



 the bacteria,” Commerce determined that it is more similar
 to an asset than a direct material input. J.A. 8174.
      In calculating the surrogate financial ratios, Commerce
 used the Thai Ajinomoto financial statements. The finan-
 cial statements of Thai Fermentation were also on the rec-
 ord, however, Commerce determined them to be incomplete
 and that it would not have been able to fully evaluate the
 financial information contained therein. The parties disa-
 greed as to which financial statements were appropriate
 for use. CP Kelco supported the use of Thai Ajinomoto’s
 financial statements, arguing that all other available state-
 ments are incomplete, not fully translated, or from compa-
 nies that do not produce comparable merchandise. Fufeng
 argued that Thai Ajinomoto’s financial statements are dis-
 torted by countervailable subsidies and supported the use
 of Thai Fermentation’s financial statements. Commerce
 determined that the Thai Fermentation financial state-
 ments are incomplete because they lack complete English
 translations, precluding Commerce from fully evaluating
 the financial information contained therein, and noted its
 practice to exclude such statements. J.A. 8154. Specifi-
 cally, two complete paragraphs at the bottom of Accounting
 note twelve, concerning depreciation of assets, are untrans-
 lated. Id. at n.70; compare J.A. 6280–81 with J.A. 6305–
 06. Although Commerce agreed with Fufeng that the Thai
 Ajinomoto statements show evidence of the receipt of coun-
 tervailable subsidies, it noted that its general practice to
 exclude such statements presupposes the existence of other
 sufficiently reliable data. Having no such data, it found
 Thai Ajinomoto’s statements to “represent the only com-
 plete and fully translated financial statements on the rec-
 ord” and therefore “the best available information within
 the meaning of the statute.” J.A. 8152, 8154–55.
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 6                          CP KELCO US, INC. v. UNITED STATES




      B. First Trade Court Remand Order and Resulting
                     First Redetermination
      CP Kelco appealed Commerce’s final determination to
 the Trade Court, as relevant here, with respect to Com-
 merce’s decision to treat X. Campestris as an asset, rather
 than as a direct material input, and Fufeng appealed Com-
 merce’s selection of the Thai Ajinomoto financial state-
 ments over the Thai Fermentation statements for
 calculating surrogate financial ratios. CP Kelco U.S., Inc.
 v. United States, 2015 WL 1544714, at *1 (Ct. Int’l Trade
 Mar. 31, 2015) (CP Kelco I). The Trade Court upheld Com-
 merce’s decision to treat X. Campestris as an asset rather
 than as a direct material input determining it was sup-
 ported by substantial evidence and was otherwise in ac-
 cordance with law. Id. at *4. The Trade Court determined
 it was “reasonable for Commerce to use the time that
 Fufeng paid for the X. Campestris as evidence that the bac-
 teria was an asset: Fufeng’s one-time purchase and the bac-
 teria’s self-regenerating properties made it look like an
 asset.” Id. It further determined that it was proper for
 Commerce to conclude that the bacteria was an asset based
 on grounds that the “bacteria self-regenerated, such that
 Fufeng only needed to pay for the bacteria once,” rendering
 it “unlike direct material inputs used up in the production
 process.” Id.
     The Trade Court remanded Commerce’s decision to use
 the Thai Ajinomoto financial statements to calculate sur-
 rogate financial ratios for further explanation, stating that
 “Commerce never addressed why the weakness of the Thai
 Fermentation statements—incompleteness—was worse
 than the weakness of the Thai Ajinomoto statements: evi-
 dence of subsidies.” Id. at *6. The Trade Court explained
 that Commerce created its own conundrum by preemp-
 tively rejecting the Thai Fermentation statements, which
 then required it to accept the Thai Ajinomoto statements,
 the only other statements left on the record, despite evi-
 dence that Thai Ajinomoto had received countervailable
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 CP KELCO US, INC. v. UNITED STATES                           7



 subsidies. Id. at *7. Specifically, the Trade Court in-
 structed that Commerce must “compare and contrast the
 Thai Fermentation and Thai Ajinomoto financial state-
 ments, and . . . explain why the Thai Ajinomoto statements
 constitute a better source.” Id. at 8.
     In its first remand redetermination, on July 24, 2015,
 Commerce compared Thai Fermentation’s financial state-
 ments with Thai Ajinomoto’s financial statements and
 again found that Thai Ajinomoto’s statements constituted
 “the best available information on the record.” Commerce
 noted that both companies’ statements “are flawed in dif-
 ferent ways” and that it must “decide which is the more
 serious flaw.” J.A. 8242. It further noted its “well-estab-
 lished practice of excluding incomplete financial state-
 ments from consideration, whether due to missing
 information or a lack of full translation.” Id. After consid-
 ering the weaknesses of each financial statement, Com-
 merce found the possibility that the Thai Fermentation
 statements are missing vital information to be the greater
 flaw. It found that Thai Ajinomoto’s statements, although
 containing evidence of countervailable subsidies, are “com-
 plete and reliable” and the “parties . . . had an opportunity
 to comment on the complete financial statements.” J.A.
 8244–45. In rejecting the Thai Fermentation statements
 once again, Commerce explained that missing information
 in a financial statement could have a significant impact on
 the antidumping calculations and “parties cannot be al-
 lowed to selectively decide which portions of a financial
 statement to . . . leave untranslated,” depriving other par-
 ties the opportunity to comment on potentially important
 information. J.A. 8244. Finally, it noted that “Fufeng had
 every opportunity to provide a full translation of Thai Fer-
 mentation’s financial statements but that it failed to do so.”
 Id.
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 8                          CP KELCO US, INC. v. UNITED STATES




     C.   Second Trade Court Remand Order and Resulting
                     Second Redetermination
     Fufeng again appealed Commerce’s selection of the
 Thai Ajinomoto statements to the Trade Court. This time,
 the Trade Court determined that Commerce did not “faith-
 fully compare the financial statements side by side” and
 had not “plumbed the implications [of the Thai Ajinomoto
 statements’ countervailable subsidies] as it had plumbed
 the issues caused by incompleteness” affecting the Thai
 Fermentation statements. CP Kelco U.S., Inc. v. United
 States, 2016 WL 1403657, at *5 (Ct. Int’l Trade Apr. 8,
 2016) (CP Kelco II). It further determined that Commerce
 does not have a “well-established” practice of rejecting all
 incomplete financial statements that would justify reject-
 ing the Thai Fermentation statements summarily. Id.
 Therefore, the Trade Court again remanded, instructing
 Commerce to comply with the “court’s main remand in-
 struction to compare the Thai Ajinomoto and Thai Fermen-
 tation financial statements side by side in an evenhanded
 manner, evaluating the relative strengths and weaknesses
 of each.” Id. Alternatively, the Trade Court offered that
 Commerce may find the Thai Fermentation statements to
 be missing “vital information,” which the Trade Court pre-
 viously recognized as a past practice of Commerce. Id. n.5.
 As another alternative, the Trade Court offered that Com-
 merce could explain a change in practice, “from rejecting
 statements when they are missing vital information . . . to
 invariably rejecting any incomplete statements.” Id.
     On August 22, 2016, after adopting a practice of reject-
 ing incomplete financial statements unless there are no
 other financial statements on the record, Commerce for a
 third time determined that the Thai Ajinomoto statements
 were the best available information to calculate surrogate
 financial ratios. It first acknowledged that Commerce has
 not always rejected incomplete financial statements with-
 out qualification but has at times rejected incomplete state-
 ments that are missing key information when it was
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 CP KELCO US, INC. v. UNITED STATES                           9



 “vital.” J.A. 8260 (citing Ass’n of Am. Sch. Paper Suppliers
 v. United States, 791 F. Supp. 2d 1292, 1304 (Ct. Int’l Trade
 2011)). It then explained that because it considers that any
 missing information may be “vital,” Commerce “intends to
 follow a practice of rejecting from use financial statements
 that are incomplete, whether due to missing or removed
 components of those statements or due to a lack of full Eng-
 lish translation where the record evidence indicates that
 any part of the specific financial statements in question
 was not provided by a filer, unless there are no other finan-
 cial statements left on the record.” J.A. 8262. Commerce
 reasoned that this practice avoids Commerce’s “speculation
 as to whether the missing information is a ‘critical’ or ‘key’
 component necessary for the calculation of the surrogate
 financial ratios.” J.A. 8262–63. Commerce then rejected
 Thai Fermentation’s financial statements because they
 lack complete translations, finding that while the Thai
 Ajinomoto statements “show evidence of countervailable
 subsidies, [they] are complete and reliable and all parties
 have been afforded the opportunity to comment on their
 full content.” J.A. 8263.
     D.   Third Trade Court Remand Order and Resulting
                     Third Redetermination
     Fufeng again challenged Commerce’s remand results
 before the Trade Court. Despite having given Commerce
 the opportunity to explain a change in its practice, CP
 Kelco II, 2016 WL 1403657, at *5 n.5, the Trade Court de-
 termined that Commerce’s new policy is not consistent
 with its statutory mandate because it is “not reasonably
 aimed at identifying the best available information or cal-
 culating the antidumping margins as accurately as possi-
 ble” and “leads to an unreasoned outcome not supported by
 the record in these proceedings.” CP Kelco U.S., Inc. v.
 United States, 211 F. Supp. 3d 1338, 1341–42 (Ct. Int’l
 Trade 2017) (CP Kelco III). The Trade Court explained
 that Commerce has “yet to provide any discussion of the
 issues presented by the use of the Thai Ajinomoto
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 10                         CP KELCO US, INC. v. UNITED STATES




 statements or, more generally, by the use of financial state-
 ments that reflect countervailable subsidies.” Id. at 1344.
 It again remanded Commerce’s redetermination explain-
 ing that “Commerce should not select the Thai Ajinomoto
 statements unless it first compares the Thai Ajinomoto and
 Thai Fermentation financial statements side by side in an
 evenhanded manner, evaluating the relative strengths and
 weaknesses of each.” Id. at 1345. Alternatively, it stated
 that “Commerce can reject the Thai Fermentation state-
 ments after making a reasoned finding that the two un-
 translated paragraphs in footnote twelve are ‘vital’ to the
 Department’s analysis of the data.” Id. The Trade Court
 instructed that “Commerce must specifically discuss what
 is missing from the Thai Fermentation statements and
 how the fact of the missing information impedes [Com-
 merce’s] calculations.” Id. It gave Commerce the option of
 “either (1) explicitly exploring the relative impact of the im-
 perfection in the Thai Ajinomoto statements (evidence of
 subsidies) and that in the Thai Fermentation statements
 (incompleteness) or (2) making a fact-sensitive finding that
 the Thai Fermentation statements are missing ‘vital’ infor-
 mation.” Id.
     On September 18, 2017, in its third remand redetermi-
 nation, Commerce chose to reject the Thai Fermentation
 statements “after making a fact-sensitive finding that the
 Thai Fermentation statements are missing ‘vital’ infor-
 mation.” J.A. 8280. In support of its finding, Commerce
 explained that “Thai Fermentation’s financial statements
 are missing complete translations for two paragraphs of
 the property plant and equipment (i.e., fixed asset) foot-
 note,” a key component of a company’s financial state-
 ments. Id. Among other reasons, it explained that “the
 fixed asset footnote supports the use of depreciation ex-
 pense,” a critical component in ratio calculations. J.A.
 8281. It also explained that “by virtue of comprising all or
 most of a company’s overhead costs, depreciation expense
 is an integral component of the denominator of the selling,
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 CP KELCO US, INC. v. UNITED STATES                         11



 general and administrative (SG&A) expense and profit ra-
 tios.” Id. Because depreciation can significantly impact
 the surrogate financial ratios, such information is vital.
 Although Accounting note twelve contains a fully trans-
 lated depreciation schedule, it is not reasonable to only rely
 on such a schedule because “the narrative portions of a
 company’s footnotes can provide vital information regard-
 ing asset impairments, changes in useful lives of fixed as-
 sets, revaluations of fixed assets and the capitalization of
 production costs, among other things that are not shown on
 the numeric fixed asset schedule.” J.A. 8283. Accordingly,
 Commerce concluded it could not reasonably rely on Thai
 Fermentation’s financial statements as the best available
 information because the information missing from Thai
 Fermentation’s fixed asset footnote is of “critical im-
 portance” to its analysis. J.A. 8283–84.
     E.   Fourth Trade Court Remand Order and Resulting
                     Fourth Redetermination
     After another appeal, the Trade Court again remanded
 to Commerce stating that “[u]nlike the prior proceedings
 cited by Commerce, here the Department has not identified
 a particular depreciation methodology, class of fixed assets,
 or statement by the auditor in the Thai Fermentation
 statements that is questionable or unreliable.” CP Kelco
 U.S., Inc. v. United States, 2018 WL 1703143, at *3 (Ct.
 Int’l Trade Apr. 5, 2018) (CP Kelco IV). It explained that
 the “28-page Thai Fermentation financial statements pro-
 vided to Commerce have full English translations with the
 exception of two paragraphs in a footnote concerning fixed
 assets,” which no one has alleged were intentionally omit-
 ted. Id. Although Commerce has stated that the state-
 ments might be more reliable if fully translated,
 “Commerce has not made the case that the statements are
 unreliable, warranting their wholesale rejection.” Id. The
 Thai Ajinomoto statements, on the other hand, “are in fact,
 as opposed to hypothetically, unreliable, due to evidence of
 countervailable subsidies.” Id. The Trade Court found
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 12                         CP KELCO US, INC. v. UNITED STATES




 that “Commerce’s general discussion about depreciation
 does not comply with the [Trade Court’s] instruction to
 make ‘a fact-sensitive finding that the Thai Fermentation
 statements are missing “vital” information.’” Id. (quoting
 CP Kelco III, 211 F. Supp. 3d at 1345). Finding that the
 record does not support more than one reasonable result
 and does not contain substantial evidence supporting Com-
 merce’s decision to discard the Thai Fermentation state-
 ments, and that “any mystery surrounding the Thai
 Fermentation statements is essentially of [Commerce’s]
 own making” where “Commerce is—and has always been—
 in possession of the ‘missing’ information” yet has failed to
 solicit a translation or translate the paragraphs itself, the
 Trade Court instructed that on remand, Commerce may
 “either translate the two paragraphs or leave them as is.
 Regardless, Commerce must use the Thai Fermentation
 statements to calculate surrogate financial ratios.” Id. at
 *3–4. The Trade Court made clear that “the court will not
 provide [Commerce] any further room to maneuver.” Id. at
 *4.
    Although Commerce continued to find that the Thai
 Fermentation statements are missing “specific information
 that is vital in nature” and “should not be used to calculate
 the surrogate financial ratios,” pursuant to the Trade
 Court’s directive, on July 5, 2018, Commerce relied upon
 the Thai Fermentation financial statements to calculate
 Fufeng’s weighted-average dumping margins for the final
 remand redetermination results. J.A. 8297 (Fourth Rede-
 termination). As a result, the weighted-average dumping
 margin for Fufeng changed to 0.00 percent. J.A. 8300.
                F.   Fifth Trade Court Decision
     In light of Commerce’s use of the Thai Fermentation
 statements, the Trade Court found that the remand results
 were supported by substantial evidence and sustained the
 Fourth Redetermination. CP Kelco U.S., Inc. v. United
 States, 2018 WL 4469912 (Ct. Int’l Trade Sept. 17, 2018)
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 CP KELCO US, INC. v. UNITED STATES                       13



 (CP Kelco V). CP Kelco appealed the Trade Court’s deci-
 sions sustaining Commerce’s: (1) treatment of X. Cam-
 pestris as an asset rather than a direct material input (CP
 Kelco I); and (2) determination to use Thai Fermentation’s
 financial statements to calculate surrogate financial ratios
 (CP Kelco V). We have jurisdiction under 28 U.S.C.
 § 1295(a)(5).
                         DISCUSSION
     We review Commerce’s decision using the same stand-
 ard of review applied by the Trade Court, while carefully
 considering that court’s analysis. Diamond Sawblades
 Mfrs. Coal. v. United States, 866 F.3d 1304, 1310 (Fed. Cir.
 2017). We decide legal issues de novo and uphold factual
 determinations if they are supported by substantial evi-
 dence. 19 U.S.C. § 1516a(b)(1)(B)(i); see Diamond Saw-
 blades, 866 F.3d at 1310. For factual findings, substantial
 evidence is “such relevant evidence as a reasonable mind
 might accept as adequate to support a conclusion” consid-
 ering the record as a whole. See Novartis AG v. Torrent
 Pharm. Ltd., 853 F.3d 1316, 1324 (Fed. Cir. 2017). For le-
 gal conclusions, Commerce, in carrying out its statutorily
 assigned tasks, must make reasonable choices within stat-
 utory constraints. See, e.g., Nucor Corp. v. United States,
 927 F.3d 1243, 1248–49 (Fed. Cir. 2019). Related princi-
 ples govern the interpretation of regulations by an agency.
 See Kisor v. Wilkie, 139 S. Ct. 2400, 2414–18 (2019).
     Commerce must provide an explanation that is ade-
 quate to enable the court to determine whether its choices
 are actually reasonable. See CS Wind Vietnam Co. v.
 United States, 832 F.3d 1367, 1376–77 (Fed. Cir. 2016). It
 must “examine the record and articulate a satisfactory ex-
 planation for its action.” Yangzhou Bestpak Gifts & Crafts
 Co. v. United States, 716 F.3d 1370, 1378 (Fed. Cir. 2013).
 Although we uphold “a decision of less than ideal clarity if
 the agency’s path may reasonably be discerned,” Bowman
 Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S.
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 14                         CP KELCO US, INC. v. UNITED STATES




 281, 286 (1974), the required explanation must reasonably
 tie the determination under review to the governing statu-
 tory standard and to the record evidence by indicating
 what statutory interpretations the agency is adopting and
 what facts the agency is finding. “[A]n agency’s statement
 of what it ‘normally’ does or has done before . . . is not, by
 itself, an explanation of ‘why its methodology comports
 with the statute.’ Whether it does so in a particular agency
 decision or in a cited earlier decision, the agency must
 ground such a normal or past practice in the statutory
 standard.” CS Wind Vietnam, 832 F.3d at 1377 (quoting
 SKF USA Inc. v. United States, 263 F.3d 1369, 1383 (Fed.
 Cir. 2001).
      A. Treatment of X. Campestris as an asset rather than
                a direct material input (CP Kelco I)
      We begin with Commerce’s decision to treat X. Cam-
 pestris as an asset rather than a direct material input. CP
 Kelco contends that Commerce’s decision not to treat the
 production strain of X. Campestris as a factor of production
 and assign it a surrogate value is unsupported by substan-
 tial evidence and is not in accordance with law. Appellant’s
 Br. 31–32. It argues that the plain language of the statute
 instructs Commerce to value factors of production, such as
 raw materials, used in producing the subject merchandise,
 and X. Campestris is a factor of production necessary for
 the production of xanthan gum. Id.; Appellant’s Reply Br.
 19 (citing 19 U.S.C. § 1677b(c); Chevron, U.S.A. Inc. v. Nat.
 Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984)). It
 further argues that X. Campestris meets the factors Com-
 merce has previously used to determine whether an input
 is a direct material input. Appellant’s Br. 33–36 (citing
 Seamless Refined Copper Pipe and Tube from the People’s
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 CP KELCO US, INC. v. UNITED STATES                         15



 Republic of China, 75 ITADOC 60725 (Oct. 1, 2010) (“Cop-
 per Pipe and Tube”) (cmt. 7)). 3
     Fufeng contends that substantial evidence supports
 Commerce’s finding that Fufeng and Deosen “acquired
 [their] [X]. [C]ampestris strain for payment-in-full long be-
 fore the POI, and that the acquisitions included the right
 to further grow and exploit the resulting bacteria for the
 production of xanthan gum.” Appellees’ Br. 55 (citing J.A.
 8174). It argues that the Trade Court correctly held that
 the factors in Copper Pipe and Tube did not preclude Com-
 merce’s record-based finding that the bacteria was like an
 asset properly valued through the surrogate financial ra-
 tios. Id. at 55–56 (citing J.A. 10). The United States 4 ar-
 gues that the statute does not speak to what criteria to use
 to determine whether something is a factor of production,
 and Commerce properly exercised its discretion to deter-
 mine that X. Campestris was already accounted for in the
 surrogate financial ratios such that it did not need to be
 separately valued as a raw material. United States’ Appel-
 lee Br. 12–14.




     3    “[T]he Department will typically value a material
 as a direct material input if it is 1) consumed continuously
 with each unit of production, 2) required for a particular
 segment of the production process, 3) essential for produc-
 tion, 4) not used for ‘incidental purposes,’ or 5) otherwise a
 ‘significant input into the manufacturing process rather
 than miscellaneous or occasionally used materials.’” Cop-
 per Pipe and Tube at cmt. 7.
      4   The United States did not appeal the judgment be-
 low and therefore takes no position on Commerce’s selec-
 tion of financial statements. It responds solely to CP
 Kelco’s challenge to the Trade Court’s March 31, 2015 de-
 cision concerning X. Campestris.
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 16                         CP KELCO US, INC. v. UNITED STATES




     The relevant statute directs Commerce to “determine
 the normal value of the subject merchandise on the basis
 of the value of the factors of production utilized in produc-
 ing the merchandise” and the “valuation of the factors of
 production shall be based on the best available information
 regarding the values of such factors in a market economy
 country or countries considered to be appropriate by the
 administering authority.” 19 U.S.C. § 1677b(c)(1). The
 statute requires Commerce to consider the value of factors
 of production, but does not specify what factors Commerce
 must use to determine whether something is or is not a fac-
 tor of production. 5 Commerce evaluates whether some-
 thing is a factor of production by determining whether it is
 a direct material input. As the Trade Court recognized,
 “Commerce has not used one monolithic test to evaluate
 whether or not an item is a direct material input or not, but
 has instead proceeded case by case.” J.A. 10. Here, Com-
 merce determined that X. Campestris is not a direct mate-
 rial input, but instead is an asset because it is self-
 replicating and does not require ongoing purchases to re-
 plenish its supply. See, e.g., Copper Pipe and Tube.
     Commerce’s decision to treat X. Campestris as an asset
 rather than a direct material input is supported by sub-
 stantial evidence and is in accordance with law. Commerce
 found that evidence on the record of the present investiga-
 tion shows that Fufeng and Deosen “acquired [their] [X].
 [C]ampestris strain for payment-in-full long before the [pe-
 riod of investigation], and that the acquisitions included
 the right to further grow and exploit the resulting bacteria


      5   Section 1677b(c)(3) merely indicates that “factors
 of production utilized in producing merchandise include,
 but are not limited to” (A) hours of labor required, (B) quan-
 tities of raw materials employed, (C) amounts of energy
 and other utilities consumed, and (D) representative capi-
 tal cost, including depreciation.
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 CP KELCO US, INC. v. UNITED STATES                       17



 for the production of xanthan gum,” and that Fufeng con-
 tinually regenerates the bacteria for use in its xanthan
 gum production. J.A. 8174. Due to Fufeng’s “ownership
 and regenerative use of the bacteria,” Commerce deter-
 mined that it is more similar to an asset than a direct ma-
 terial input. Id. Because substantial evidence supports
 Commerce’s findings, the Trade Court did not err in sus-
 taining its decision.
      B. Commerce’s use of Thai Fermentation’s financial
         statements to calculate surrogate financial ratios
                           (CP Kelco V)
      As an initial matter, Fufeng argues that CP Kelco
 failed to exhaust its administrative remedies and is pre-
 cluded from challenging the Fourth Redetermination by
 failing to provide comments in response to the Draft Fourth
 Redetermination. CP Kelco responds that it filed com-
 ments before the Draft arguing Commerce should interpret
 the Trade Court’s Fourth Remand Order to use an average
 of the financial ratios derived from the two companies’ fi-
 nancial statements, which Commerce addressed in its
 Fourth Remand Redetermination. It argues that even had
 it repeated comments that it made throughout the entire
 proceeding, its efforts would have been futile as the Fourth
 Remand Order compelled Commerce to use the Thai Fer-
 mentation statements. CP Kelco’s efforts would have likely
 been futile given the Trade Court’s directive, but regard-
 less, CP Kelco is not precluded from challenging the Fourth
 Remand Redetermination because it raised the arguments
 before the Draft and Commerce briefly addressed them.
 See J.A. 8298.
    CP Kelco argues that the Trade Court exceeded its au-
 thority by directing Commerce to use the Thai Fermenta-
 tion statements to calculate surrogate financial ratios
 rather than review the determination for substantial evi-
 dence. Appellant’s Br. 18. It contends that Commerce pro-
 vided a reasoned explanation as to why the Thai Ajinomoto
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 18                        CP KELCO US, INC. v. UNITED STATES




 statement should be used, id. at 19, and that Commerce’s
 reliance in its Fourth Remand Redetermination on Thai
 Fermentation’s partially translated statements to calcu-
 late dumping margins is unreasonable, unsupported by
 substantial evidence, and is otherwise not in accordance
 with law, id. at 23–26. Fufeng responds that the Trade
 Court properly ordered Commerce to use Thai Fermenta-
 tion data after it repeatedly failed to conduct the compari-
 son required by the substantial evidence and best available
 information standards that would be required to use the
 Thai Ajinomoto data. Appellees’ Br. 49–50. It contends
 that Commerce, each time, gave short shrift to the Thai
 Fermentation statements, because they were missing two
 untranslated paragraphs, yet chose to use Thai
 Ajinomoto’s subsidy-distorted data. Id. at 34–35.
      It was reasonable for Commerce to rely on the Thai
 Ajinomoto data. In CP Kelco III, the Trade Court gave
 Commerce the option of “either (1) explicitly exploring the
 relative impact of the imperfection in the Thai Ajinomoto
 statements (evidence of subsidies) and that in the Thai Fer-
 mentation statements (incompleteness) or (2) making a
 fact-sensitive finding that the Thai Fermentation state-
 ments are missing ‘vital’ information.” CP Kelco III at
 1345. On September 18, 2017, in its third remand redeter-
 mination, Commerce chose the option to reject the Thai
 Fermentation statements “after making a fact-sensitive
 finding that the Thai Fermentation statements are missing
 ‘vital’ information.” J.A. 8280. In support of its finding,
 Commerce explained that “Thai Fermentation’s financial
 statements are missing complete translations for two par-
 agraphs of the property plant and equipment (i.e., fixed as-
 set) footnote,” a key component of a company’s financial
 statements. Id. Among other reasons, it first explained
 that “the fixed asset footnote supports the use of deprecia-
 tion expense,” a critical component in ratio calculations.
 J.A. 8281. It also explained that “by virtue of comprising
 all or most of a company’s overhead costs, depreciation
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 CP KELCO US, INC. v. UNITED STATES                        19



 expense is an integral component of the denominator of the
 selling, general and administrative (SG&A) expense and
 profit ratios.” Id. Therefore “depreciation can significantly
 impact the surrogate financial ratios,” and such infor-
 mation is vital. Id. Although Accounting note twelve con-
 tains a fully translated depreciation schedule, Commerce
 determined that it is not reasonable to only rely on such a
 schedule because “the narrative portions of a company’s
 footnotes can provide vital information regarding asset im-
 pairments, changes in useful lives of fixed assets, revalua-
 tions of fixed assets and the capitalization of production
 costs, among other things that are not shown on the nu-
 meric fixed asset schedule.” J.A. 8283. Accordingly, Com-
 merce concluded, because the information missing from
 Thai Fermentation’s fixed asset footnote is of “critical im-
 portance” to its analysis, it could not reasonably rely on
 Thai Fermentation’s financial statements as the best avail-
 able information. J.A. 8283–84.
     At least as of this third redetermination by Commerce
 where it determined that the missing information in the
 untranslated financial statement was vital information
 and of “critical importance,” Commerce had adequately ex-
 plained the reasoning underlying its decision to use the
 Thai Ajinomoto financial statements rather than the Thai
 Fermentation financial statements. To be clear, we do not
 decide today whether Commerce must accept or refuse a
 partial translation of financial statements in every case, or
 that it is required to do so. But we are satisfied that here,
 with its third redetermination, Commerce sufficiently ex-
 plained its reason for choosing between two flawed finan-
 cial statements.      We therefore reinstate Commerce’s
 decision to use the Thai Ajinomoto financial statements to
 calculate the surrogate financial ratios.
                        CONCLUSION
     For the foregoing reasons, we affirm the Trade Court’s
 decision sustaining Commerce’s treatment of X.
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 20                         CP KELCO US, INC. v. UNITED STATES




 Campestris as an asset rather than a direct material input.
 We reverse its decision sustaining Commerce’s use of the
 Thai Fermentation financial statements and reinstate
 Commerce’s determination to use the Thai Ajinomoto fi-
 nancial statements to calculate the surrogate financial ra-
 tios. We have considered the parties’ remaining arguments
 and find them unpersuasive.
   AFFIRMED-IN-PART AND REVERSED-IN-PART
                            COSTS
      Each party shall bear its own costs.
