Administrative Protective Order

An administrative protective order is the legal mechanism that controls the limited disclosure of business proprietary information to representatives of interested parties. The Department authorizes the release of proprietary information under administrative protective order only when the representatives file a request in which they agree to the following four conditions: (a) to use the information only in the antidumping proceeding, (b) to secure the information and protect it from disclosure to any person not subject to an administrative protective order, (c) to report any violation of the terms of the protective order, and (d) to acknowledge that they may be subject to sanctions if they violate the terms of the order. (Section 777(c) of the Act. See also Proprietary Information and Proprietary Treatment.)

Affiliated Persons

Affiliated persons (affiliates) include (1) members of a family, (2) an officer or director of an organization and that organization, (3) partners, (4) employers and their employees, and (5) any person or organization directly or indirectly owning, controlling, or holding with power to vote, 5 percent or more of the outstanding voting stock or shares of any organization and that organization. In addition, affiliates include (6) any person who controls any other person and that other person, and (7) any two or more persons who directly control, are controlled by, or are under common control with, any person. "Control" exists where one person or organization is legally or operationally in a position to exercise restraint or direction over the other person or organization. (Section 771(33) of the Act; section 351.102(b) and 351.401(f) of the regulations.)

Antidumping Law

The United States antidumping laws are set forth in Title VII of the Tariff Act of 1930, as amended ("the Act") (19 U.S.C. 1673 et seq.).

Arms-length Transactions (between affiliates)

Generally, the Department may use transactions between affiliates as a basis for normal value, cost of production, and constructed value only if the transactions are at arms length. Arms-length transactions are those in which the selling price between the affiliated parties is comparable to the selling prices in transactions involving persons who are not affiliated. The Department accounts for terms of sale, conditions of delivery, and other circumstances related to the sales in deciding if the selling prices are comparable. Sales not made at arms-length are considered to be outside the ordinary course of trade.

Certification of Accuracy

Any person that submits factual information to the Department must include with the submission a certification of the completeness and accuracy of the factual information. Certifications must be made by a knowledgeable official responsible for presentation of the factual information and by the party's legal counsel or other representative, if any. A sample certification form is included as Appendix V to the questionnaire. (Section 782 (b) of the Act and section 351.303 (g) of the regulations).

Circumstances of Sale

In comparing normal value to export price or constructed export price for market economy cases, the Department makes adjustments for certain differences in circumstances of sale that exist because the conditions or terms of sale in the two markets differ. This adjustment normally is limited to differences in direct selling expenses (and assumptions of expenses on behalf of the buyer) that the Department does not adjust for under other more specific provisions. (Section 773(a)(6)(C)(iii) of the Act and 351.410 of the regulations; See also Direct vs. Indirect Expenses.) Note that these adjustments are also made for non-market economy cases involving constructed export price comparisons.

Comparison Market

The comparison market is the home or third-country market from which the Department selects the prices used to establish normal values for market economy cases. (See also Viability.)

Constructed Export Price

(See Export Price and Constructed Export Price.)

Constructed Export Price Offset

When it is not possible to base normal value and export price (CEP or CEP) on sales at the same level of trade, the law provides, subject to certain conditions, for an adjustment to normal value. However, where the Department establishes different functions at the different levels of trade, but the data available do not form an appropriate basis for determining a level of trade adjustment, the law provides for a limited adjustment in the form of the "constructed export price offset." This adjustment does not apply in export price comparisons, and the Department will make the adjustment only when normal value is established at a level of trade more remote from the factory than the level of trade of the constructed export price. The offset is a deduction from normal value in the amount of indirect selling expenses incurred in the comparison market. The amount of this deduction may not exceed (i.e., it is "capped" by) the amount of indirect selling expenses deducted in calculating constructed export price. (Section 773(a)(7)(B) of the Act and section 351.412(f) of the regulations; see also Level of Trade, Level of Trade Adjustment.)

Constructed Value

For market economy cases, when there are no sales of the foreign like product in the comparison market suitable for matching to the subject merchandise (including, for example, when the Department disregards sales because they are below the cost of production), the Department uses constructed value as the basis for normal value. The constructed value is the sum of (1) the cost of materials and fabrication of the subject merchandise, (2) selling, general, and administrative expenses and profit of the foreign like product in the comparison market, and (3) the cost of packing for exportation to the United States.

(Section 773(e) of the Act.)

Contemporaneous Sales

In investigations, the Department normally compares average export prices (or constructed export prices) to average normal values. The averages normally are based on sales made over the course of the period of investigation. In administrative reviews of existing antidumping orders, on the other hand, the Department normally compares the export price (or constructed export price) of an individual U.S. sale to an average normal value for a "contemporaneous month."

The preferred month is the month in which the particular U.S. sale was made. If, during the preferred month, there are no sales in the comparison market of a foreign like product that is identical to the subject merchandise, the Department will then employ a six-month window for the selection of contemporaneous sales. For each U.S. sale, the Department will calculate an average price for sales of identical merchandise in the most recent of the three months prior to the month of the U.S. sale. If there are no such sales, the Department will use sales of identical merchandise in the earlier of the two months following the month of the U.S. sale. If there are no sales of identical merchandise in any of these months, the Department will apply the same progression to sales of similar merchandise.

Cost of Manufacture

The cost of manufacture is the sum of material, fabrication and other processing costs incurred to produce the products under investigation. (See also Cost of Production.)

Cost of Production

For market economy cases, cost of production means the cost of producing the foreign like product. The cost of production is the sum of (1) material, fabrication, and other processing costs, (2) selling, general, and administrative expenses, and (3) the cost of containers and other packing expenses. The Department may disregard comparison market sales in calculating normal value if they are made at prices which are less than the cost of production. The Department will disregard all sales below cost if made: (A) within an extended period of time (normally one year) in substantial quantities ( at least 20 percent of the volume of the product examined is sold below cost or the weighted-average unit price is below the weighted-average cost for the period examined); and (B) at prices that do not permit recovery of costs within a reasonable period of time (i.e., the price is less than the weighted-average cost of production for the whole period examined). Although the Department initiates any cost of production inquiries for all sales of the foreign like product, this determination is made on a product-specific basis. (Section 773(b) of the Act, and sections 351.406 and 351.407 of the regulations.) Refer to IA Policy Bulletin 94.1 for initiation standards for COP inquiries.

Credit Expense

Credit expense is a type of expense for which the Department frequently makes circumstances -of-sale adjustments. It is the interest expense incurred (or interest revenue foregone) between shipment of merchandise to a customer and receipt of payment from the customer. The Department normally imputes the expense by applying a firm's annual short-term borrowing rate in the currency of the transaction, prorated by the number of days between shipment and payment, to the unit price. If actual payment dates are not kept in a way that makes them accessible, the calculation may be based on the average of the number of days that accounts receivable remain outstanding. (See also Imputed Expenses.)

Date of Sale

Because the Department attempts to compare sales made at the same time, establishing the date of sale is an important part of the dumping analysis. The Department normally uses the date of invoice as recorded in the seller's records kept in the ordinary course of business. However, the Department may use another date if it better reflects the date on which the material terms of the sale were established. This is normal for long term contracts. In other words, the date of the invoice is the presumptive date of sale, although this presumption may be rebutted. Where invoices do not exist, the Department will examine the respondent's records to identify the appropriate date of sale. (Section 351.401 of the regulations).

Difference in Merchandise Adjustments

For market economy cases, when normal value is based on sales in the comparison market of a product which is similar, but not identical, to the product sold in the United States, the Department may adjust normal value to account for differences in the variable costs of producing the two products. Generally, the adjustment is limited to differences in the costs of materials, labor and variable production costs that are attributable to physical differences in the merchandise. The Department will not adjust for differences in fixed overhead administrative expenses, or profit. (Section 351.411 of the regulations).

Direct vs. Indirect Expenses

In calculating and adjusting normal value, the Department treats selling expenses differently depending on whether they are direct expenses or indirect expenses. For instance, circumstances-of-sale adjustments normally involve only direct expenses (and assumptions of expenses on behalf of the buyer, see below) while the constructed export price offset involves indirect expenses.

Direct expenses generally must be (1) variable and (2) traceable in a company's financial records to sales of the merchandise under investigation.

1. Variable vs. fixed expenses: Direct expenses are typically variable expenses that are incurred as a direct and unavoidable consequence of the sale (i.e., in the absence of the sale these expenses would not be incurred). Indirect expenses are fixed expenses that are incurred whether or not a sale is made.

The same expense may be classified as fixed or variable depending on how the expense is incurred. For example, if an exporter pays an unaffiliated contractor to perform a service, this fee would normally be considered variable and treated as a direct expense (provided that condition 2, below, is also satisfied). However, if the exporter provides the service through a salaried employee, the fixed salary expense will be treated as an indirect expense.

2. Tying of the expense to sales of the merchandise under investigation: Selling expenses must be reasonably traceable to sales of the merchandise under investigation to qualify as direct selling expenses. However, a fixed expense remains indirect even if allocable to the merchandise under investigation

Common examples of direct selling expenses include credit expenses, commissions, and the variable portions of guarantees, warranty, technical assistance, and servicing expenses. Common examples of indirect selling expenses include inventory carrying costs, salesmen's salaries, and product liability insurance. The Department also classifies the fixed portion of expenses, such as salaries for employees who perform technical services or warranty repairs, as indirect expenses.

The Department treats assumptions of a customer's expenses as if they were direct expenses, provided they are attributable to a later sale of the merchandise by the customer. For example, the Department considers expenses incurred for advertising aimed at retailers to be assumptions when the exporter is selling to wholesalers. (Section 351.404(d) of the regulations).

Discounts

A discount is a reduction to the gross price that a buyer is charged for goods. Although the discount need not be stated on the invoice, the buyer remits to the seller the face amount of the invoice, less discounts. Common types of discounts include early payment discounts, quantity discounts, and loyalty discounts.

Dumping

Dumping occurs when imported merchandise is sold in, or for export to, the United States at less than the normal value of the merchandise. The dumping margin is the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise. The weighted-average dumping margin is the sum of the dumping margins divided by the sum of the export prices and constructed export prices.

Export Price and Constructed Export Price

Export price and constructed export price refer to the two methods of calculating prices for merchandise imported into the United States. The Department compares these prices to normal values to determine whether goods are dumped. Both export price and constructed export price are calculated using the price at which the subject merchandise is first sold to a person not affiliated with the foreign producer or exporter (the "starting price").

Generally, a U.S. sale is calculated as an export price sale when the first sale to an unaffiliated person occurs before the goods are imported into the United States. Generally, a U.S. sale is calculated as a constructed export price sale when the first sale to an unaffiliated person occurs after importation. However, if the first sale to the unaffiliated person is made by a person in the United States affiliated with the foreign exporter, constructed export price applies even if the sale occurs before importation, unless the U.S. affiliate performs only clerical functions in connection with the sale.

The Department makes adjustments to the price to the first unaffiliated customer in calculating the export price or constructed export price. For both export price and constructed export price the Department adds packing charges, if not already included in the price, rebated import duties, and, if applicable, certain countervailing duties (not applicable for non-market economy cases). Also for both, the Department deducts transportation costs and export taxes or duties (not applicable for non-market economy cases). No other adjustments are made in calculating export price. However, in calculating the constructed export price, the Department also deducts selling commissions and other expenses incurred in selling the subject merchandise in the United States, the cost of any further manufacture or assembly performed in the United States, and a profit attributable to the U.S. sale. (Section 772 of the Act. and section 351.401 and 351.402 (b) of the regulations)

Factors of Production

For nonmarket economy countries, the normal methodology for calculating normal value is not appropriate. Instead, the Department constructs a normal value using the nonmarket economy producer's factors of production. The factors of production include, but are not limited to, (1) the hours of labor required to produce the merchandise, (2) the quantities of raw materials employed, (3) the amounts of energy and other utilities consumed, and (4) representative capital costs, including depreciation. These factors of production are then valued in a market economy country that is at a level of economic development comparable to that of the nonmarket economy country and is a significant producer of the subject merchandise or comparable merchandise. (Section 773(c)(3) of the Act.)

Facts Available

The Department seeks to make its antidumping determinations on the basis of responses to its antidumping questionnaires. However, for a variety of reasons, the data needed to make such determinations may be unavailable or unusable on the record of the case. In such instances, the law requires the Department to makes its determinations on the basis of "the facts otherwise available" (more commonly referred to as "the facts available"). The Department also must use the facts available where an interested party or any other person: (1) withholds information requested by the Department; (2) fails to provide requested information by the requested date or in the form and manner requested; (3) significantly impedes an antidumping proceeding; or (4) provides information that cannot be verified.

In selecting the information to use as the facts available, the law authorizes the Department to make an inference which is adverse to an interested party if the Department finds that party failed to cooperate by not acting to the best of its ability to comply with a request for information. However, the law also provides that when the Department relies on secondary information (information derived from the petition, or the dumping rate determined in a prior segment of a proceeding rather than on information obtained in the course of an antidumping proceeding the Department must, to the extent practicable, corroborate that information from independent sources that are reasonably at the Department's disposal. Corroborated information is information considered reliable and relevant. Final calculated rates from prior segments need not be corroborated as their reliability and relevance has already been established in the prior segment.

The Department will consider using submitted information that does not meet all of the Department's requirements if: (1) the information is submitted within applicable deadlines; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for a determination; (4) the party establishes that it acted to the best of its ability; and (5) the Department can use the information without undue difficulties. Finally, if an interested party promptly informs the Department of difficulties it is having in responding to a request for information, the Department will consider modifying its request to the extent necessary to avoid imposing an unreasonable burden on the party. (Sections 776 and 782(c)-(e) of the Act. and section 351.308 of the regulations.)

Foreign Like Product

The term "foreign like product" refers to merchandise sold in the comparison market that is identical or similar to the subject merchandise. When used in the questionnaire, foreign like product means all merchandise that is sold in the comparison market and that fits within the description of merchandise provided in Appendix III to the questionnaire. (Section 771(16) of the Act. See also Identical Merchandise and Similar Merchandise.) There are no foreign like products for nonmarket economy cases. Factors of production analysis is used to determine normal values. (See Factors of Production.).

Further Manufacturing Adjustment

In calculating a constructed export price, the Department normally deducts from the price of the merchandise sold in the United States the cost of any further manufacture or assembly performed in the United States by, or for, the exporter or an affiliate. However, if the value of the further processing is likely to exceed substantially the value of the subject merchandise in its imported condition, the Department may use an alternative basis for the constructed export price. If possible, the Department would use the price of subject merchandise sold to an unaffiliated customer by the producer, exporter, or affiliated seller. If there is an insufficient quantity of such sales, the Department may rely on any other reasonable basis. (Sections 772(d)(2) and 772(e) of the Act, and Section 351.404 of the regulations.)

Home Market

The home market refers to the market for sales of the foreign like product in the country in which the merchandise under investigation is produced. Home market sales are the preferred basis for normal value. (See also Third-Country Market and Viability.)(Section 351.404 of the regulation)

Identical Merchandise

The Department prefers to compare U.S. sales to sales of foreign sales of identical merchandise. Identical merchandise is merchandise that is produced by the same manufacturer in the same country as the subject merchandise, and which the Department determines is identical or virtually identical in physical characteristics with the subject merchandise, as imported into the United States. (See also Similar Merchandise and Foreign Like Product.)

Imputed Expenses

Imputed expenses generally are opportunity costs (rather than actual costs) that are not reflected in the financial records of the company being investigated, but which must be estimated and reported for purposes of an antidumping inquiry. Common examples of imputed expenses include credit expenses and inventory carrying costs.

Indirect Expenses

See Direct vs. Indirect Expenses.

Inventory Carrying Costs

Inventory carrying costs are the interest expenses incurred (or interest revenue foregone) between the time the merchandise leaves the production line at the factory to the time the goods are shipped to the first unaffiliated customer. The Department normally calculates these costs by applying the firm's annual short-term borrowing rate in the currency of the country where the merchandise is held, prorated by the number of days between leaving the production line and shipment to the customer, to the unit cost or price. (See also Imputed Expenses.)

Level of Trade

In order to establish whether difference in levels of trade exist, the Department reviews distribution systems, including categories of customers, selling activities, and levels of selling expenses for each type of sale. Different levels of trade are typically characterized by purchasers at different stages in the chain of distribution and sellers performing qualitatively and/or quantitatively different selling activities. Different levels of trade necessarily involve difference in selling activities, although differences in selling activities alone are not sufficient to establish differences in levels of trade. Similarly, customer categories such as "distributor, "wholesaler," "retailer," and "end-user" are often use ful in identifying levels of trade, although they, too, are insufficient in themselves to establish differences in levels of trade. Rather, the Department evaluates differences in levels of trade based on a seller's entire market process. (Section 351.412(a)-(c) of the Department's regulations.)

Level of Trade Adjustment

To the extent practicable, the Department calculates normal values based on sales at the same level of trade. When the U.S. sale is an export price sale, the level of trade of the U.S. sale is that of the starting price. When the U.S. sale is a constructed export price sale, the level of trade of the U.S. sale is determined for the constructed export price, not the starting price. When the Department is unable to find sales in the comparison market at that same level of trade as the U.S. sale, the Department may adjust the normal value to account for differences in levels of trade between the two markets.

The Department will make these adjustments only when there is a difference in the levels of trade (i.e., there is a difference between the place of the customers in the marketing process, and actual functions performed by the sellers and that difference affects price comparability. The Department will measure the effect on price comparability by determining whether there is a consistent pattern of price differences between sales at the different levels of trade in the comparison market. The Department normally will calculate any adjustment for level of trade based on the percentage difference between averages of the prices at the different levels of trade in the comparison market, less any expenses adjusted for elsewhere in the normal value calculation. (Sections 773(a)(1) and (7) of the Act.)

Market-Oriented Industry

For nonmarket economy (NME) cases, the Department may find a market-oriented industry exists when it finds that in an entire industry: (1) there is virtually no government involvement in setting prices or amounts produced; (2) it is privately or collectively owned; or (3) market- determined prices are paid for all significant inputs. (Normally, imports of merchandise from an NME are not subject to countervailing duty.

Such a decision is based on information provided by the nonmarket economy exporters and producers. If an industry is found to be a market-oriented industry, the normal value will be calculated on the basis of home market or third country prices or costs. That industry would also be subject to a countervailing duty investigation should one be petitioned and initiated.

Movement Expenses

Movement expenses are expenses directly attributable to bringing the merchandise from the original place of shipment to the place of delivery of the U.S. or foreign market sale. These expenses may include freight and freight insurance charges, brokerage and handling fees, export taxes, and warehousing expenses incurred after the merchandise leaves the original place of shipment.

Normally, the product facility is considered to be the original place of shipment. However, where export price, constructed export price, or normal value is based on a sale made by a reseller unaffiliated with the producer, the Department may treat the place from which the reseller shipped the merchandise as the original place of shipment. Sections 772)c)(2)(A) and 773(a)(6)(B)(ii) of the Act; section 351.401(e) of the regulations.)

Nonmarket Economy

A nonmarket economy country is any foreign country that the Department determines does not operate on market principles of cost and pricing structures. The Department considers the following factors about a foreign country in making these decisions: (1) the extent to which the currency is convertible; (2) the extent to which wage rates are determined by free bargaining between labor and management; (3) the extent to which joint ventures or foreign investment are permitted; (4) the extent of government ownership or control of means of production; (5) the extent of government control over allocation of resources and over price and output decisions of enterprises; and (6) other factors the Department considers appropriate. (Section 771(18)(B) of the Act.)

Normal Value

Normal value is the term applied to the adjusted price of the foreign like product in the home or third-country (comparison) market, or to the constructed value of the subject merchandise. The Department compares the normal value to the export price or constructed export price to determine the margin of dumping, if any.

The Department initially seeks to calculate normal values based on price. If there are adequate sales in the home market (see Viability), the Department calculates normal value based on the price at which the foreign like product is first sold (generally, to unaffiliated parties) in that market. In the absence at a usable home market, and if there are adequate sales in a third-country market, the Department calculates normal value based on the price at which the foreign like product is first sold (generally, to unaffiliated parties) in the third-country market. If there are no appropriate home or third-country market sales, the Department determines normal value by calculating the constructed value.

To ensure that a fair comparison with the export price or constructed export price is made, the Department makes adjustments to the price used to calculate the normal value. The Department adds U.S. packing charges and deducts any of the following expenses included in the comparison market price: packing charges, transportation costs, and any internal tax that was rebated or not collected on the subject merchandise. The Department may make additional adjustments to account for differences in the conditions under which sales are made in the United States and the comparison market. Thus, the Department may increase or decrease the normal value to account for differences in quantities, physical characteristics of the merchandise, levels of trade, and other circumstances of sale. (Section 773(a) of the Act.)

Normal value for nonmarket economy cases is determined by factors of production analysis. (See Factors of Production.)

Ordinary Course of Trade

In calculating normal value, the Department will consider only those sales in the comparison market that are in the ordinary course of trade. Generally, sales are in the ordinary course of trade if made under conditions and practices that, for a reasonable period of time prior to the date of sale of the subject merchandise, have been normal for sales of the foreign like product. (Section 771(15) of the Act and section 351.102(b) of the regulations. See also Arms-length Transactions.)

Proprietary Information

Proprietary information is sensitive business data that would cause substantial harm to the submitter if disclosed publicly. Examples of information that the Department normally treats as proprietary, if requested and not already in the public domain, include trade secrets concerning the production process, production and distribution costs, terms of sale, individual prices, and the names of customers and suppliers.

Proprietary Treatment

If a party requests proprietary treatment of information, and if the Department agrees that the information is proprietary, the Department will protect the information from public disclosure. If the Department does not agree that the information is proprietary, it will return the information and not rely on it in the proceeding, unless the submitter agrees that it may be made public. When requested, Department will disclose proprietary information only to United States International Trade Commission and United States Customs Service officials and, under limited administrative protective orders, representatives of interested parties. (Section 777(b) of the Act. See also Administrative Protective Order.)

Rebates

Similar to discounts, rebates are reductions in the gross price that a buyer is charged for goods. Unlike discounts, rebates do not result in a reduction in the remittance from the buyer to the seller for the particular merchandise with which the rebate is associated. Rather, a rebate is a refund of monies paid, a credit against monies due on future purchases, or the conveyance of some other item of value by the seller to the buyer after the buyer has paid for the merchandise. When the seller establishes the terms and conditions under which the rebate will be granted at or before the time of sale, the Department reduces the gross selling price by the amount of the rebate. (See also Discounts and Direct vs. Indirect Expenses.)

Separate Rates

For nonmarket economy cases, the Department normally calculates one rate for all exporting companies. However, if an exporter demonstrates that its export activities are independent of government control, it can receive an individually calculated antidumping duty rate. This separate rate is calculated using the U.S. price the exporter set and the inputs of the manufacturer that supplied the goods to the exporter, valued in a surrogate country. All companies that do not submit a response to the antidumping questionnaire or do not adequately establish that their export activities are independent of government control are subject to the single economy-wide rate.

Similar Merchandise

For market economy cases, in deciding which sales of the foreign like product to compare to sales of the subject merchandise, the Department first seeks to compare sales of identical merchandise. If there are no sales of the identical foreign like product, the Department will compare sales of the foreign like product similar to the subject merchandise. The similar foreign like product is merchandise that is produced by the same manufacturer in the same country as the subject merchandise, and which, in order of preference, is either (1) similar to the subject merchandise in component materials, use, and value, or (2) similar in use to, and reasonably comparable to, the subject merchandise. (Section 771 (16) of the Act.) See also Identical Merchandise and Foreign Like Product.

Subject Merchandise

Subject merchandise is the merchandise under investigation, i.e., the merchandise described in Appendix III to the questionnaire, and sold in, or to, the United States. (Section 771(25) of the Act.)

Surrogate Country

For nonmarket economy cases, the Department values factors of production in a surrogate country. The surrogate is a market economy country that is at a level of economic development comparable to that of the nonmarket economy country and is a significant producer of the subject merchandise or comparable merchandise nonmarket economy country. The Department cannot use price or costs inside a NME, except in the case of a Market Oriented Industry. (Section 773(c)).

Technical Service Expenses

Technical service expenses are typically incurred when a producer provides technical advice to customers which are industrial users of the product. Generally, the Department considers travel expenses and contract services performed by unaffiliated technicians to be direct expenses. The Department treats salaries paid to the seller's employees who provide technical services as indirect expenses.

Third-Country Market

When the Department cannot use home market sales as the basis for determining normal value, one of the alternative methods authorized by the antidumping law is the use of sales to a third -country market, i.e., export sales of the foreign like product to a country other than the United States. Generally, in selecting a third-country market to be used as the comparison market, the Department will choose one of the three third-country markets with the largest aggregate quantity of sales of the foreign like product. In selecting which country, the Department will consider product similarity, the similarity of the third-country and U.S. markets, and whether the sales to the third country are representative. (See also Home Market and Viability and section 773(a)(1) of the Act and section 351.404 at the regulations.)

Verification

To establish the adequacy and accuracy of information submitted in response to questionnaires and other requests for information, the Department examines the records of the party that provided the information and interviews company personnel who prepared the questionnaire response and are familiar with the sources of the data in the response. This process is called verification. The Department must verify information relied upon in making a final determination in an investigation, or in an administrative review when revocation of an antidumping order is properly requested. The Department also must verify information submitted in an administrative review if an interested party so requests and no verification of the producer or exporter had been conducted during the two immediately proceeding reviews of that producer or exporter, or if good cause for verification is shown. (Section 782(i) of the Act.) Also section 351.307 of the regulations.

Viability

For market economy cases, to calculate normal value based on sales in the home market, the Department must determine that the volume of sales is adequate in that market and that a "particular market situation" does not make their use inappropriate. To calculate normal value based on sales in a third-country market, the Department must make the same determinations with respect to sales to the third country, and the sales must be "representative." These determinations establish whether a market is viable.

The Department normally finds sales to be adequate if the quantity of the foreign like product sold in the market is 5 percent or more of the quantity sold to the United States. In unusual situations, the Department may find that sales below the 5-percent threshold are adequate, or that sales above the threshold are not. Also in unusual situations, the Department may apply the 5-percent test on the basis of value, rather than quantity. The terms "particular market situation" and "representative" are undefined in the statute of regulations. A particular market situation might exist, for example, where there was a single sale in the comparison market that constituted 5 percent or more of the quantity sold to the United States, or where government control of pricing is such that prices cannot be competitively set, or where there are differing patterns of demand in the United States and comparison market. (Section 773(a)(1) of the Act and section 351.404(b)(2) of the regulations.)