Case: 21-2205 Document: 59 Page: 1 Filed: 09/23/2022
`
`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`XI'AN METALS & MINERALS IMPORT & EXPORT
`CO., LTD.,
`Plaintiff
`
`SHANXI PIONEER HARDWARE INDUSTRIAL CO.,
`LTD., BUILDING MATERIAL DISTRIBUTORS,
`INC.,
`Plaintiffs-Appellants
`
`v.
`
`UNITED STATES, MID CONTINENT STEEL&
`WIRE, INC.,
`Defendants-Appellees
`______________________
`
`2021-2205, 2021-2227
`______________________
`
`Appeals from the United States Court of International
`Trade in Nos. 1:20-cv-00103-LMG, 1:20-cv-00111-LMG,
`1:20-cv-00116-LMG, Senior Judge Leo M. Gordon.
`______________________
`
`Decided: September 23, 2022
`______________________
`
`JOSEPH DIEDRICH, Husch Blackwell LLP, Madison, WI,
`argued for all plaintiffs-appellants. Plaintiff-appellant
`Shanxi Pioneer Hardware Industrial Co., Ltd. also repre-
`sented by JEFFREY S. NEELEY, STEPHEN W. BROPHY, Wash-
`ington, DC.
`
`

`

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`2
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
`
`
` LIZBETH ROBIN LEVINSON, Fox Rothschild LLP, Wash-
`ington, DC, for plaintiff-appellant Building Material Dis-
`tributors, Inc. Also represented by BRITTNEY RENEE
`POWELL, RONALD MARK WISLA.
`
` ROBERT R. KIEPURA, Commercial Litigation Branch,
`Civil Division, United States Department of Justice, Wash-
`ington, DC, argued for defendant-appellee United States.
`Also represented by SOSUN BAE, BRIAN M. BOYNTON,
`PATRICIA M. MCCARTHY; AYAT MUJAIS, International Office
`of the Chief Counsel for Trade Enforcement & Compliance,
`United States Department of Commerce, Washington, DC.
`
` ADAM H. GORDON, The Bristol Group PLLC, Washing-
`ton, DC, argued for defendant-appellee Mid Continent
`Steel & Wire, Inc. Also represented by LAUREN FRAID,
`JENNIFER MICHELE SMITH.
`______________________
`
`Before MOORE, Chief Judge, NEWMAN and STOLL, Circuit
`Judges.
`
`STOLL, Circuit Judge.
`Shanxi Pioneer Hardware Industrial Co., Ltd. (Pio-
`neer) and Building Material Distributors, Inc. (BMD) ap-
`peal the decision of the United States Court of
`International Trade affirming the United States Depart-
`ment of Commerce’s final results in the tenth administra-
`tive review of the antidumping order on certain steel nails
`from the People’s Republic of China. Based on its finding
`that Pioneer did not cooperate to the best of its ability with
`Commerce’s request for information, Commerce applied
`adverse facts available against Pioneer and assigned an
`antidumping margin of 118.04 percent to Pioneer. We af-
`firm the Court of International Trade’s judgment based on
`its conclusion that Commerce’s decision to apply adverse
`facts available was supported by substantial evidence.
`
`

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`XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`3
`
`BACKGROUND
`Commerce protects domestic producers from unfair
`trade practices, such as dumping, by investigating whether
`imported merchandise is being sold in the United States at
`less than fair value and imposing antidumping duties on
`subject merchandise to level the playing field. 19 U.S.C.
`§ 1673. To determine the fair value of merchandise from
`non-market economies, such as China, Commerce con-
`structs a respondent-specific per unit “normal value” rep-
`resenting the cost of production of the merchandise.
`Commerce uses this normal value to determine whether
`the merchandise is being dumped. If so, Commerce calcu-
`lates a dumping margin and a corresponding duty assess-
`ment rate for that respondent and issues an antidumping
`duty order. At the request of interested parties, Commerce
`reviews and reassesses its antidumping duty orders annu-
`ally after the initial investigation. § 1675(a).
`This story begins in 2008. Mid Continent Steel & Wire,
`Inc. (Mid Continent) petitioned Commerce to investigate
`the importation and sale of certain steel nails from China.
`During this initial investigation, Commerce determined
`that the subject merchandise was being dumped and issued
`an antidumping duty order. Notice of Antidumping Duty
`Order: Certain Steel Nails From the People’s Republic of
`China, 73 Fed. Reg. 44961 (Aug. 1, 2008). Because Com-
`merce has designated China as a non-market economy,
`Commerce applies a rebuttable presumption that all Chi-
`nese producers are subject to government control and
`therefore should be assigned a country-wide dumping mar-
`gin. Commerce selects a number of producers or importers
`for individual examination to determine this country-wide
`dumping margin and other margins. Pioneer—a Chinese
`producer and importer/exporter of steel nails (the subject
`merchandise)—applied for and received a separate rate in
`this initial antidumping investigation. In other words, Pi-
`oneer demonstrated that it was independent of government
`control and should be assessed a rate different from the
`
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`country-wide rate. Commerce did not select Pioneer for in-
`dividual examination. Commerce set the country-wide
`margin for China at 118.04 percent. Id. at 44965.
`In 2013, Commerce published the results of its third
`administrative review of the antidumping order, covering
`merchandise entries that occurred between August 1, 2010,
`and July 31, 2011. Commerce announced its intention to
`require that [a respondent in the third administra-
`tive review] and all other future respondents for
`this case report all FOPs [factors of production]
`data on a CONNUM-specific basis using all prod-
`uct characteristics in subsequent reviews, as docu-
`mentation and data collection requirements should
`now be fully understood by [the particular respond-
`ent] and all other respondents.
`Certain Steel Nails From the People’s Republic of China;
`Issues and Decision Memorandum for the Final Results of
`the Antidumping Duty Administrative Review, A-570-909,
`ARP 10–11, at 36–40 (Dep’t of Com. Mar. 5, 2013)
`(2010–2011 Final IDM) (emphasis added); see also Certain
`Steel Nails From the People’s Republic of China; Final Re-
`sults of Third Antidumping Duty Administrative Review;
`2010–2011, 78 Fed. Reg. 16651 (Mar. 18, 2013).
`“‘CONNUM’ is a contraction of the term ‘control num-
`ber,’ and is Commerce jargon for a unique product.” Xi’an
`Metals & Mins. Imp. & Exp. Co. v. United States, 520
`F. Supp. 3d 1314 (Ct. Int’l Trade June 9, 2021) (CIT Op.).
`A particular CONNUM roughly corresponds to a particular
`product defined “in terms of a hierarchy of specified physi-
`cal characteristics determined in each antidumping pro-
`ceeding.” Id. Commerce defines CONNUMs by identifying
`“key physical characteristics of the subject merchandise”
`that are “commercially meaningful” in the United States
`marketplace and “have an impact on costs of production.”
`Gov’t Br. 7. CONNUM-specific data allows Commerce to
`perform comparisons of its constructed normal values to
`
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`5
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`export prices on as precise a basis as possible. CIT Op., 520
`F. Supp. 3d. at 1322; Gov’t Br. 7–8. Commerce has re-
`quired reporting factors of production (FOPs) on a
`CONNUM-specific basis using similar language in various
`antidumping proceedings for over a decade.
`In 2018, Commerce initiated the administrative review
`underlying this appeal, the tenth administrative review of
`the antidumping order covering the period of August 1,
`2017, to July 31, 2018. Commerce selected three manda-
`tory respondents, including Pioneer, for examination from
`among the companies that requested to be considered sep-
`arate rate companies. Certain Steel Nails from the Peo-
`ple’s Republic of China: Preliminary Results of the
`Antidumping Duty Administrative Review and Prelimi-
`nary Determination of No Shipments; 2017–2018, 84 Fed.
`Reg. 55906 (Oct. 18, 2019) (2017–2018 Preliminary Re-
`sults). This marked the first time that Pioneer was selected
`as a mandatory respondent in the course of this antidump-
`ing proceeding and was therefore the first time that Pio-
`neer had an individual obligation to cooperate with
`Commerce’s investigation, including responding to Com-
`merce’s questionnaires designed to obtain information nec-
`essary to calculate dumping margins.
`Commerce issued questionnaires to the mandatory re-
`spondents, requesting FOP data for the subject merchan-
`dise using “actual quantities consumed . . . on a CONNUM-
`specific basis.” J.A. 279. The questionnaire stated that a
`respondent could alternatively provide FOP data using a
`different allocation methodology if the respondent provided
`a “detailed explanation of all efforts undertaken to report
`the actual quantity . . . on a CONNUM-specific basis,” how
`the estimated FOP consumption was derived, and “why the
`methodology[] selected is the best way to accurately
`demonstrate an accurate consumption amount.” Id. Pio-
`neer responded to the questionnaire, representing that it
`had “reported the factors of production (FOPs) using actual
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`quantities consumed to produce the merchandise under in-
`vestigation on a CONNUM-specific basis.” J.A. 824.
`As part of the administrative review process, inter-
`ested parties can submit comments to Commerce regarding
`the respondents’ responses. In this case, Mid Continent
`challenged the integrity of Pioneer’s data, asserting that
`although Pioneer “indicate[d] that it ha[d] provided
`CONNUM-specific FOPs, it clearly ha[d] not.” J.A. 1012
`(footnote omitted). Explaining that Pioneer had “made no
`attempt whatsoever to differentiate” its estimated FOP
`values on a product-by-product basis “in any way,” Mid
`Continent contended that this “failure to calculate product-
`specific FOPs is highly distortive as it allocates consump-
`tion equally across all CONNUMs and distorts the margin
`calculations.” J.A. 1013.
`Based on Mid Continent’s comments, Commerce issued
`Pioneer a supplemental questionnaire seeking clarifica-
`tion. Again, Commerce asked Pioneer to “provide a narra-
`tive description and any supporting documentation to
`explain why [it was] unable to provide more specific mate-
`rial input FOPs on a CONNUM or product group basis.”
`J.A. 1026–27. And again, Commerce offered Pioneer the
`option to develop an alternative “methodology that cap-
`tures consumption differences based on the different
`sizes/weights of the nails produced” to the extent Pioneer
`did not “track these material consumptions on a more spe-
`cific basis.” J.A. 1027. Pioneer responded to Commerce’s
`supplemental questionnaire, this time admitting that it
`was not providing the FOPs on a CONNUM-specific basis.
`J.A. 1042–45. Instead, Pioneer repeatedly asserted that it
`had “no cost records that would support any other alloca-
`tion methodology” and provided no further explanation. Id.
`On October 18, 2019, Commerce published its prelimi-
`nary results. 2017–2018 Preliminary Results, 84 Fed. Reg.
`55906. [J.A. 82] Using the FOP data that Pioneer pro-
`vided in its initial questionnaire response, Commerce
`
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`XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`7
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`calculated a dumping margin of 13.88 percent for Pioneer.
`Id. at 55907. At Commerce’s invitation, Mid Continent
`filed comments on the preliminary results, highlighting Pi-
`oneer’s “fail[ure] to provide information critical to the cal-
`culation of accurate margins,” despite the fact that it had
`an “opportunity to remedy these deficiencies” in its supple-
`mental response. J.A. 1192. According to Mid Continent,
`despite Commerce’s “specific[] instruct[ions to] Shanxi [Pi-
`oneer] to revise its . . . FOPs to capture product distinc-
`tions,” or, alternatively, to “develop a methodology to take
`distinctions in weight, size, or surface area into account,”
`Pioneer did neither. J.A. 1194. Mid Continent asserted
`that, as the producer of the subject merchandise, Pioneer
`“[c]learly . . . possesse[d] knowledge and/or records . . . of
`its products that would have allowed it to develop more ac-
`curate FOP allocation methodologies.” Id. From Mid Con-
`tinent’s perspective, Pioneer’s failure to do so “rendered
`[its] response unusable for margin calculations.” J.A. 1192.
`On April 22, 2020, Commerce published its final re-
`sults. Commerce reconsidered Pioneer’s rate assignment
`in view of the comments submitted by Mid Continent. Be-
`cause Pioneer “withheld information” requested of it,
`“failed to provide data in the form and manner requested,”
`and “significantly impeded” the administrative review,
`Commerce resorted to facts otherwise available (FA). Cer-
`tain Steel Nails from the People’s Republic of China; Issues
`and Decision Memorandum for the Final Results of the An-
`tidumping Duty Administrative Review, A-570-909, ARP
`17–18, at 34 (Dep’t of Com. Apr. 15, 2020) (2017–2018 Final
`IDM). In particular, Commerce noted that although “Pio-
`neer had notice of the general record-keeping requirements
`relating to this order,” Pioneer “did not heed . . . instruc-
`tions to maintain appropriate data such that it could
`properly report FOPs.” Id. at 32. And, Commerce ex-
`plained, applying adverse inferences when selecting from
`facts available (AFA) was also warranted because Pioneer
`failed to act to the best of its ability to comply with a
`
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`request for information. Specifically, Pioneer’s failure to
`“maintain[] adequate records” or “develop[] a methodology
`to report product-specific costs,” id. at 34, despite “multiple
`opportunities” throughout the underlying administrative
`review, constituted a failure to act to the best of its ability,
`id. at 32. Commerce assigned a margin of 118.04 percent—
`the country-wide rate for China—to Pioneer.
`Pioneer and two separate rate respondents, BMD and
`Xi’an Metals & Minerals Import & Export Co., appealed
`Commerce’s final results to the Court of International
`Trade, which consolidated
`the cases.
` CIT Op.,
`520 F. Supp. 3d at 1318–19. The respondents argued that
`Commerce violated the Administrative Procedure Act
`(APA) when it announced it would require future respond-
`ents to comply with the CONNUM-specific reporting re-
`quirement. Pioneer argued that requiring respondents to
`“report CONNUM-specific costs amount[ed] to a ‘rule’ that
`Commerce ‘promulgated . . . without proper notice and
`comment rule making’” under the APA. Id. at 1322–23 (al-
`teration in original). Furthermore, Pioneer complained
`that Commerce “denied respondent [Pioneer] the oppor-
`tunity to use another allocation methodology by requiring
`a more specific method of reporting and recordkeeping.”
`Id. at 1327.
`The Court of International Trade sustained Com-
`merce’s final results. The court explained that “Com-
`merce’s adoption of a CONNUM-specific reporting
`requirement d[id] not amount to the implementation of a
`legislative rule that would require notice-and-comment
`rulemaking.” Id. at 1323. And because Commerce “deter-
`mined that it needed data that more accurately reflected
`the costs associated with the production and sale of the
`subject merchandise,” Commerce’s announcement of the
`CONNUM-specific reporting requirement was “a state-
`ment of policy” and not an “explicit invocation of general
`legislative authority” that would have triggered the notice-
`and-comment requirement of the APA. Id. at 1324.
`
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`Additionally, the court determined that substantial evi-
`dence supported Commerce’s application of AFA. Specifi-
`cally, the court explained that despite having been on
`notice of Commerce’s reporting requirement since 2013 and
`having been given multiple opportunities throughout the
`course of the underlying administrative review to comply
`or explain why it could not comply, Pioneer did neither.
`The court concluded that these facts supported Commerce’s
`determination that Pioneer failed to cooperate to the best
`of its ability, warranting application of AFA.
`Pioneer and BMD appeal. Our court consolidated the
`appeals.
` We have
`jurisdiction under 28 U.S.C.
`§ 1295(a)(5).
`
`DISCUSSION
`We review de novo the Court of International Trade’s
`judgments, reapplying the same statutory standard of re-
`view as that court. NEXTEEL Co. v. United States,
`28 F.4th 1226, 1233 (Fed. Cir. 2022). Commerce’s “special
`expertise in administering the anti-dumping law entitles
`its decisions to deference.” Nippon Steel Corp. v. United
`States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (citing cases).
`Both the Court of International Trade and our court review
`Commerce’s findings for substantial evidence. Id. Sub-
`stantial evidence is “such evidence that a reasonable mind
`might accept as adequate to support a conclusion.” SeAH
`Steel VINA Corp. v. United States, 950 F.3d 833, 840
`(Fed. Cir. 2020) (cleaned up).
`On appeal, Pioneer1 primarily argues that Commerce’s
`use of FA and AFA based on Pioneer’s failure to comply
`with the CONNUM-specific reporting requirement was un-
`lawful because the CONNUM-specific reporting require-
`ment
`is a
`legislative rule that should have been
`
`1 BMD joined Pioneer in its opening and reply briefs
`and waived oral argument.
`
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`promulgated through notice-and-comment rulemaking.
`Separately, Pioneer asserts that Commerce’s decision to
`apply AFA and assignment of the 118.04 percent margin
`was unsupported by substantial evidence. We address
`each issue in order.
`
`I
`the
`that
`We begin with Pioneer’s arguments
`CONNUM-specific reporting requirement is unlawful. Pi-
`oneer asserts that Commerce’s CONNUM-specific report-
`ing requirement is a rule promulgated without the
`requisite notice-and-comment rulemaking procedure un-
`der the APA and therefore null. Appellants’ Br. 20–21. In
`the alternative, Pioneer claims that even if the CONNUM-
`specific reporting requirement is exempt from notice-and-
`comment rulemaking, the rule is inconsistent with the Tar-
`iff Act of 1930 and therefore invalid. Id. at 31. We address
`each argument in turn.
`
`A
`Under the APA, certain proposed “legislative rules” ad-
`vanced by agencies must be promulgated through notice-
`and-comment rulemaking. 5 U.S.C. § 553(b). The APA,
`however, makes an exception for “interpretative rules, gen-
`eral statements of policy, or rules of agency organization,
`procedure, or practice.” § 553(b)(3)(A). Our court has ar-
`ticulated the distinction between legislative rules, which
`require notice-and-comment rulemaking, and other rules
`that do not: “Legislative rules alter the landscape of indi-
`vidual rights and obligations, binding parties with the force
`and effect of law; interpretive rules, on the other hand,
`merely clarify existing duties for affected parties.” Stupp
`Corp. v. United States, 5 F.4th 1341, 1352 (Fed. Cir. 2021)
`(citing Kisor v. Wilkie, 139 S. Ct. 2400, 2420 (2019)); see
`also Splane v. West, 216 F.3d 1058, 1063 (Fed. Cir. 2000).
`On appeal, Pioneer “direct[s] our attention to American
`Mining Congress v. Mine Safety & Health Administration,
`
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`995 F.2d 1106 (D.C. Cir. 1993),” where our sister circuit
`held that a rule is a legislative rule “if any one of [a number
`of] conditions are satisfied.” Nat’l Org. of Veterans’ Advo-
`cates, Inc. v. Sec’y of Veterans Affs., 260 F.3d 1365, 1376
`n.11 (Fed. Cir. 2001) (citing Am. Mining, 995 F.2d at 1112);
`see Appellants’ Br. 22. Here, Pioneer argues that the
`fourth American Mining factor—“whether the rule effec-
`tively amends a prior legislative rule,” Veterans’ Advocates,
`260 F.3d at 1376—is satisfied. Specifically, Pioneer argues
`that Commerce’s CONNUM-specific reporting require-
`ment is a legislative rule because it “effectively amends”
`Commerce’s existing regulation, 19 C.F.R. § 351.401(g).
`Section 351.401(g) recites, in relevant part:
`(2) Reporting allocated expenses and price
`adjustments. Any party seeking to report an ex-
`pense or a price adjustment on an allocated basis
`must demonstrate to the Secretary’s satisfaction
`that the allocation is calculated on as specific a ba-
`sis as is feasible, and must explain why the alloca-
`tion methodology used does not cause inaccuracies
`or distortions.
`(3) Feasibility. In determining . . . whether an al-
`location is calculated on as specific a basis as is fea-
`sible, the Secretary will take into account the
`records maintained by the party in question in the
`ordinary course of its business, as well as such fac-
`tors as the normal accounting practices in the coun-
`try and industry in question and the number of
`sales made by the party during the period of inves-
`tigation or review.
`§ 351.401(g)(2), (3).
`According to Pioneer, § 351.401(g) requires only that
`respondents offer records that are maintained “in the ordi-
`nary course of [the respondent’s] business” and according
`to “normal accounting practices in the country and
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`industry,” or according to generally accepted accounting
`practices (GAAP). Appellants’ Br. 22–23. Pioneer argues
`that, in contrast, the CONNUM-specific reporting require-
`ment “requires all foreign exporters and producers of nails
`to maintain records in a particular way—regardless of
`GAAP.” Id. at 25. Pioneer further contends that the
`CONNUM-specific requirement relieves Commerce of its
`obligation to consider the feasibility of the reporting
`method requested and the form of the records kept by the
`exporters and producers. Pioneer thus asserts that the
`CONNUM-specific requirement alters the legal responsi-
`bilities of all respondents and of Commerce itself and there-
`fore does not merely clarify the regulation.
`As we have previously held, however, “[a] rule does not
`. . . become an amendment merely because it supplies
`crisper and more detailed lines than the authority being
`interpreted.” Veterans’ Advocates, 260 F.3d at 1376 (alter-
`ations in original) (quoting Am. Mining, 995 F.2d at 1112);
`see also CIT Op., 520 F. Supp. 3d at 1323 (citing Apex Fro-
`zen Foods Private Ltd. v. United States, 144 F. Supp. 3d
`1308, 1319–20 (Ct. Int’l Trade Feb. 2, 2016), aff’d on other
`grounds, 862 F.3d 1337 (Fed. Cir. 2017)). While Pioneer is
`correct that § 351.401(g) contemplates records that are
`maintained “in the ordinary course of [the respondent’s]
`business” or according to “normal accounting practices in
`the country and industry,” the regulation also very clearly
`states that the respondent “must explain why the alloca-
`tion methodology used does not cause inaccuracies or dis-
`tortions.” Here, Commerce explained that cost information
`in formats other than the requested CONNUM-specific for-
`mat resulted in information that “did not reasonably reflect
`the costs of production of the merchandise.” CIT Op., 520
`F. Supp. 3d at 1323 (citing 2017–2018 Final IDM at 34).
`Commerce was therefore entitled to clarify the regulation
`regarding the data used in performing margin calculations
`in the third administrative review because it needed data
`that “more accurately reflected the costs associated with
`
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`the production and sale of the subject merchandise.” Id.
`at 1324. We agree with the Court of International Trade
`that Commerce’s pronouncement “reflects a statement of
`policy rather than the agency’s explicit invocation of gen-
`eral legislative authority.” Id. Accordingly, we see no error
`in the Court of International Trade’s determination that
`the CONNUM-specific rule is not subject to the notice-and-
`comment rulemaking provisions of the APA.
`B
`Pioneer separately asserts that the CONNUM-specific
`reporting requirement is unlawful because it is incon-
`sistent with the Tariff Act and our decision in Hynix Semi-
`conductor, Inc. v. United States, 424 F.3d 1363 (Fed. Cir.
`2005). We disagree.
`Pioneer contends that 19 U.S.C. § 1677b, concerning
`the calculation of the normal value of merchandise, “clearly
`and unambiguously expresses a preference for Commerce
`to rely on a respondent’s GAAP-compliant normal books
`and records” and “does not contemplate the CONNUM-
`Specific Rule.” Appellants’ Br. 33. The relevant portion of
`§ 1677b recites:
`Costs shall normally be calculated based on the rec-
`ords of the exporter or producer of the merchan-
`dise, if such records are kept in accordance with the
`generally accepted accounting principles of the ex-
`porting country (or the producing country, where
`appropriate) and reasonably reflect the costs asso-
`ciated with the production and sale of the merchan-
`dise. The administering authority shall consider
`all available evidence on the proper allocation of
`costs, including that which is made available by the
`exporter or producer on a timely basis, if such allo-
`cations have been historically used by the exporter
`or producer, in particular for establishing appropri-
`ate amortization and depreciation periods, and
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
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`allowance for capital expenditures and other devel-
`opment costs.
`§ 1677b(f)(1)(A).
`In Hynix, we held that § 1677b(f)(1)(A) permits Com-
`merce to disregard a respondent’s GAAP-compliant records
`upon a finding, supported by substantial evidence, “that
`the costs do not reasonably reflect the costs of production
`and should not, therefore, be used.” 424 F.3d at 1369. Pi-
`oneer claims that Commerce failed to make such a finding
`here. Specifically, Pioneer takes issue with Commerce’s re-
`jection of Pioneer’s accounting methods without explaining
`“why reporting on a CONNUM-specific basis or on a
`size/weight-specific basis was necessary or why Pioneer’s
`proposed methodology was inadequate.” Appellants’
`Br. 36.
`But Commerce did explain its reasoning here. As the
`Court of International Trade explained, and as we dis-
`cussed above, Commerce determined in the third adminis-
`trative review that CONNUM-specific data is essential for
`the accurate calculation of costs due to the variations in
`physical characteristics of the merchandise. CIT Op.,
`520 F. Supp. 3d at 1324–25 (citing 2017–2018 Final IDM
`at 34 (describing the product-specific costs as “essential to
`the accurate calculation of Pioneer’s dumping margin”)).
`Commerce “explained that CONNUM-specific reporting
`yields data more specific to the costs of the subject mer-
`chandise than standard GAAP records.” Id. at 1325. In
`other words, Commerce found that Pioneer’s non-product-
`specific FOP data did not “reasonably reflect the costs of
`production and should not, therefore, be used.” Hynix, 424
`F.3d at 1369. On this record, we agree with, and therefore
`affirm, the Court of International Trade’s determination
`that Commerce’s conclusion was based on substantial evi-
`dence.
`
`

`

`Case: 21-2205 Document: 59 Page: 15 Filed: 09/23/2022
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`XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 15
`
`II
`Pioneer also argues that substantial evidence does not
`support Commerce’s decision to apply AFA. We disagree.
`Under 19 U.S.C. § 1677e, Commerce can rely on facts
`otherwise available when “necessary information is not
`available on the record” or “an interested party or any other
`person withholds information that has been requested.”
`§ 1677e(a). After determining that it can rely on FA, Com-
`merce can further apply adverse facts available if a party
`has “failed to cooperate by not acting to the best of its abil-
`ity to comply with a request for information.” § 1677e(b).
`The “best of its ability” standard requires the respondent
`to put forth its maximum effort to investigate and obtain
`full and complete answers to Commerce's inquiries. Nip-
`pon Steel, 337 F.3d at 1382.
`The Court of International Trade correctly determined
`that Commerce’s application of FA and AFA was supported
`by substantial evidence. First, in deciding to apply FA,
`Commerce reasonably determined that Pioneer’s repeated
`failure to submit its cost information on a CONNUM-
`specific basis meant that necessary information reasonably
`reflecting the costs of production was not available.2 CIT
`Op., 520 F. Supp. 3d at 1323–24.
`Second, in deciding to apply AFA, Commerce deter-
`mined that Pioneer “failed to cooperate by not maintaining
`adequate records and by not developing a methodology to
`
`2 Although Commerce incorrectly characterizes Pio-
`neer’s initial response as one “refusing” to provide the
`CONNUM-specific data, the error was harmless because
`Pioneer did not actually provide CONNUM-specific data
`and also admitted that it would not do so in response to the
`supplemental questionnaire. Pioneer stated that it did not
`have any “cost records that would support any other allo-
`cation methodology.” J.A. 1041–44.
`
`

`

`Case: 21-2205 Document: 59 Page: 16 Filed: 09/23/2022
`
`16
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`XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
`
`report product-specific costs” and thus “failed to act to the
`best of its ability to comply with a request for information.”
`2017–2018 Final IDM at 34. Substantial evidence supports
`this determination. In particular, as the Court of Interna-
`tional Trade explained, “Pioneer failed to even provide
`more than short, conclusory statements as to why it could
`not comply with Commerce’s requests, much less actually
`attempt
`to develop a methodology.”
` CIT Op.,
`520 F. Supp. 3d at 1327 (citing 2017–2018 Final IDM at
`32). Moreover, Commerce’s requests for CONNUM-specific
`data should not have come as a surprise. Commerce an-
`nounced during the third administrative review, nearly
`seven years prior to the underlying tenth administrative
`review, that it intended to require that “all other future re-
`spondents for this case report all FOPs data on a
`CONNUM-specific basis using all product characteristics
`in subsequent reviews,” explaining that by this stage in the
`antidumping proceeding, “documentation and data collec-
`tion requirements should now be fully understood” by all
`respondents. 2010–2011 Final IDM at 39. In this an-
`nouncement, Commerce specifically stated that respond-
`ents would have the responsibility to “maintain accounting
`and production records on a monthly, product-specific ba-
`sis.” Id. at 39–40. Commerce even gave an example of how
`to maintain records: “For instance, in order to calculate
`product-specific ratios for an input, such as steel wire rod,
`Hongli and all future respondents should maintain ware-
`house records, workshop records, etc., on a monthly, prod-
`uct-specific basis for that input.” Id. at 40 n.132.
`Notwithstanding its protest that the underlying adminis-
`trative review “marked the first time Pioneer was selected
`as a mandatory respondent in an administrative review,”
`Appellants’ Br. 7, Pioneer has been on notice of Com-
`merce’s reporting requirements as of 2013. Other respond-
`ents complied with Commerce’s directive and properly
`provided the requested data. Pioneer provided no reason
`that it could not have similarly done so. At a minimum,
`Pioneer should have explained to Commerce why it was
`
`

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`Case: 21-2205 Document: 59 Page: 17 Filed: 09/23/2022
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`XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 17
`
`unable to comply and developed and documented an alter-
`native methodology.
`On appeal, Pioneer asserts that “[n]ails are a simple
`product with minor variations,” and that “Pioneer reported
`selling nails with three thicknesses.” Appellants’ Br. 36.
`In Pioneer’s view, “[t]o suggest that failure to report FOPs
`on a size/weight-specific basis significantly distorts the
`margin defies common sense given the minor physical var-
`iations of this product.” Id. at 36–37