Background
In April 2024, the U.S. Department of Commerce initiated antidumping investigations into ferrosilicon imports from Brazil, Kazakhstan, Malaysia, and Russia. Commerce selected YDD Corporation LLP and TNC Kazchrome JSC as mandatory respondents. Following a preliminary determination in November 2024, Commerce issued its Final Determination in March 2025, finding sales at less-than-fair-value and calculating dumping margins for both respondents.
YDD challenged four aspects of Commerce’s Final Determination: (1) the inclusion in YDD’s dumping margin of sales that were transshipped through the United States to Canada; (2) Commerce’s application of partial adverse facts available (AFA) based on alleged withholding of information about an affiliated customer; (3) Commerce’s use of zeroing in the average-to-average margin comparison methodology; and (4) the calculation of the partial AFA portion of YDD’s weighted-average dumping margin. Kazchrome separately challenged Commerce’s selection of the shipment date, rather than the final invoice date, as the date of sale for its U.S. sales.
The Court held oral argument on May 5, 2026, and reviewed both Rule 56.2 motions for judgment on the agency record under the substantial evidence standard of 19 U.S.C. § 1516a(b)(1)(B)(i).
The Court’s Holding
Judge Choe-Groves remanded Commerce’s Final Determination in its entirety. On YDD’s Canadian-sales issue, the Court found that Commerce failed to cite any record evidence supporting its conclusion that the merchandise was destined for the United States and failed to explain why the substantial contrary evidence YDD submitted — including a customer contract, a purchase order identifying a Canadian consignee, and a signed customer letter stating the full quantity of goods would be shipped to Canada — did not satisfy Commerce’s own “knowledge test.” Post-hoc explanations offered by government counsel at oral argument could not cure the absence of reasoning in the Final IDM itself.
Because the Canadian-sales determination infected the entire margin calculation, the Court declined to reach YDD’s remaining claims regarding partial AFA, zeroing, and AFA calculation, deferring all three for Commerce to reconsider on remand once it re-evaluates whether the disputed customer’s sales belong in the investigation at all. On Kazchrome’s date-of-sale issue, the Court found that Commerce failed to explain adequately why the shipment date — rather than the invoice date presumed by 19 C.F.R. § 351.401(i) — better reflected when material terms were established, and noted that the difference between provisional and final invoice amounts in Kazchrome’s sales reconciliation suggested the parties had not reached a “meeting of the minds” as of the shipment date.
The Court emphasized that it is not the judiciary’s role to sift through the administrative record to construct a rationale that Commerce itself did not articulate, citing Motor Vehicle Mfrs. Ass’n v. State Farm and prior CIT precedent requiring agencies to explain their determinations on the face of the agency decision.
Key Takeaways
- Commerce’s “knowledge test” for excluding transshipped merchandise from a dumping margin calculation requires Commerce to actually cite and engage with the record evidence offered by the respondent — including contracts, purchase orders, and signed customer letters — and explain why such evidence is insufficient.
- An agency determination must stand or fall on the reasoning articulated in the agency’s own decision; government counsel cannot remedy an unexplained determination through oral argument before the court.
- Commerce’s regulatory presumption favors the invoice date as the date of sale under 19 C.F.R. § 351.401(i); using the shipment date instead requires a supported finding that the shipment date better reflects when material terms were set, and a discrepancy between provisional and final invoice amounts may itself undercut such a finding.
- Where a foundational error in Commerce’s margin calculation infects multiple downstream determinations (AFA application, zeroing, AFA calculation), the court may remand all dependent issues rather than address each one on the merits.
Why It Matters
This decision reinforces the procedural discipline Commerce must bring to antidumping investigations: the agency cannot rely on post-hoc rationalizations or expect courts to construct evidentiary support from a voluminous record. Exporters that provide contemporaneous documentation — contracts, purchase orders, signed letters — establishing a third-country destination for re-exported goods have a viable path to excluding those sales from the dumping margin, but only if Commerce meaningfully engages with that evidence in its final determination.
The remand also signals that Commerce’s practice of defaulting to the shipment date when provisional and final prices diverge may face heightened scrutiny. If a seller’s final price is not fixed until after shipment — as Kazchrome’s two-invoice structure illustrated — courts may view the resulting price discrepancy as evidence that material terms were still being negotiated, making the invoice date the more legally defensible anchor for the date-of-sale analysis.