TMK IPSCO v. United States (179 F. Supp. 3d 1328, 2016)

OPINION AND ORDER

Kelly, Judge:

This consolidated action comes before the court on USCIT Rule 56.2 motions for judgment on the agency record challenging the U.S. Department of Commerce’s (“Department” or “Commerce”) determination in the countervailing duty investigation of certain oil country tubular goods (“OCTG”) from the People’s Republic of China. See Certain Oil Country Tubular Goods From the People’s Republic of China, 74 Fed. Reg. 64,045 (Dep’t Commerce Dec. 7, 2009) (final affirmative countervailing duty determination, final negative critical circumstances determination) (“Final Results”), as amended, 75 Fed. Reg. 3,203 (Dep’t Commerce Jan. 20, 2010) (amended final affirmative countervailing duty determination and countervailing duty order) (“Amended Final Results”); see also Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Certain Oil Country Tubular Goods (“OCTG”) from the People’s Republic of China, C-570-944, (Nov. 23, 2009), available at http://ia.ita.doc.gov/fm/ summary/prc/E9-28779-l.pdf (last visited June, 3, 2016) (“Final Decision Memo”).

Plaintiffs TMK IPSCO, Y&M Star L.P., Evraz Rocky Mountain Steel, Wheatland Tube Corp., and United Steelworkers (collectively “TMK”), domestic producers of OCTG and a union of OCTG workers, commenced this action pursuant to section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a (2006). The court consolidated TMK’s action with actions filed by: (1) Tianjin Pipe (Group) Corp. (“TPCO”) and Tianjin Pipe International Economic & Trading Corp. (collectively “TPCO Group”), exporters of OCTG; (2) Maverick Tube Corporation (“Maverick”), a domestic producer of OCTG; and (3) United States Steel Corporation (“U.S. Steel”), also a domestic producer of OCTG. See Order, Oct. 6, 2010, ECF No. 46. TMK, TPCO Group, Maverick, U.S. Steel, and Plaintiff-Intervenor Bureau of Fair Trade Imports & Exports, Ministry of Commerce, People’s Republic of China (“Bureau of Fair Trade”) filed Rule 56.2 motions for judgment on the agency record. See Mem. in Supp. Mot. J. Agency R. of TMK IPSCO, V&M Star L.P., Wheat-land Tube Corp., Evraz Rocky Mountain Steel, and the United Steelworkers, Oct. 6, 2010, ECF No. 55 (“TMK Mot.”); Pis. Tianjin Pipe (Group) Corp.’s and Tianjin Pipe International Economic and Trading Corp.’s Mem. P. & A. Supp. Mot. J. Agency R., Oct. 6, 2010, ECF No. 54; Mem. in Supp. Maverick Tube Corporation’s 56.2 Mot. J. Agency R., Oct. 7, 2010, ECF No. 71 (“Maverick Mot.”); Mem. in Supp. PI. United States Steel Corporation’s Mot. J. Agency R. Under Rule 56.2, Oct. 6, 2010, ECF No. 67 (“U.S. Steel Mot.”); Rule 56.2 Mot. J. Agency R. of Pl.-Intervenor Bureau of Fair Trade for Imports and Exports, Ministry of Commerce, The People’s Republic of China, Oct. 6, 2010, ECF No. 56. Defendant thereafter filed a response to the Rule 56.2 motions for judgment on the agency record filed by the above named parties. See Def.’s Resp. Opp’n to Pis.,’ PLIntervenors,’ and Def.-Intervenors’ Mots. J. Agency R., May 5, 2011, ECF No. 86 (“Def. Resp.”). U.S. Steel also filed a supplemental brief and Defendant submitted a supplemental response brief. See Opening Suppl. Br. Supp. PL United States Steel Corporation’s Mot. J. Agency R. Under Rule 56.2, Sept. 30, 2015, ECF No. 142 (“U.S. Steel Suppl. Br.”); Def.’s Suppl. Resp. Br. Pursuant to This Ct.’s July 2, 2015 Scheduling Order, Dec. 17, 2015, ECF No. 145 (“Def. Suppl. Resp.”). TMK and U.S. Steel each filed replies to Defendant’s response to their motions for judgment on the agency record. See Reply Mem. Supp. Mot. J. Agency R. of TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steelworkers, Feb. 16, 2016, ECF No. 146; Reply Br. Supp. PL United States Steel Corp.’s Mot. J. Agency R. Under Rule 56.2, Feb. 16, 2016, ECF No. 147 (“U.S. Steel Reply”).

BACKGROUND

On April 28, 2009, in response to a petition filed by TMK, Maverick, U.S. Steel, and other domestic companies (collectively “Petitioners”), Commerce initiated a countervailing duty investigation of OCTG from the People’s Republic of China for the period of January 1, 2008 through December 31, 2008. See Certain Oil Country Tubular Goods from the People’s Republic of China, 74 Fed. Reg. 20,678, 20,679-80 (Dep’t Commerce May 5, 2009) (initiation of countervailing duty investigation); see also Petitions for the Imposition of Anti-dumping and Countervailing Duties: Certain Oil Country Tubular Goods From the People’s Republic of China, PD 3 (Apr. 8, 2009) (“Petition”). Commerce selected four Chinese producers and exporters of subject merchandise as mandatory respondents: Jiangsu Changbao Steel Tube Co., Ltd. (“Changbao”), TPCO, Wuxi Seamless Oil Pipe Co., Ltd. (“Wuxi”), and Zhejiang Jianli Enterprise Co., Ltd. (“Jianli”). See Respondent Selection Memorandum at 6, PD 69 (June 3, 2009). Commerce issued its final determination on November 23, 2009, see Final Results, 74 Fed. Reg. at 64,045, which Commerce later amended to correct certain ministerial errors resulting in final net countervailing duty rates of 12.46% for Changbao, 10.49% for TPCO, 14.95% for Wuxi, and 15.78% for Jianli, from which Commerce calculated an all others rate of 13.41%. Amended Final Results, 75 Fed. Reg. at 3,204-05.

The parties in this action make the following challenges to Commerce’s final determination: (i) TMK, Maverick, and U.S. Steel (collectively “Plaintiffs”) challenge Commerce’s decision to postpone its investigation of certain subsidies first alleged during the course of the investigation and its refusal to investigate alleged export restraints on steel rounds and billets; (ii) TMK challenges Commerce’s refusal to investigate alleged subsidies received by Changbao; (iii) Plaintiffs challenge Commerce’s refusal to investigate subsidies prior to the date that China acceded to the World Trade Organization (“WTO”); (iv) Maverick and U.S. Steel contest Commerce’s inclusion of certain benchmarks for steel rounds and billets; (v) Plaintiffs challenge Commerce’s refusal to make a quality adjustment to the benchmarks for steel rounds and billets; (vi) U.S. Steel disputes Commerce’s freight cost adjustments to the benchmark for steel rounds and billets; (vii) TMK and U.S. Steel argue that Commerce erroneously attributed subsidies received by Changbao and Chang-•bao’s subsidiary Jiangsu Changbao Precision Steel Tube Co., Ltd. (“Precision”); (viii) U.S. Steel argues that Commerce incorrectly attributed subsidies received by TPCO and four of TPCO’s subsidiaries; (ix) U.S. Steel argues that Commerce failed to tie the provision of steel rounds and billets for less-than-adequate-remuneration (“LTAR”) only to TPCO’s sales of steel pipe; and (x) Maverick challenges Commerce’s decision not to apply facts otherwise available with an adverse ' inference (“AFA”) to Jianli’s purchases of steel rounds and billets. See TMK Mot. 12-40; Maverick Mot. 13-49; U.S. Steel Mot. 13-42, 46-65.

For the reasons set forth below, the court finds that Commerce failed to adequately explain its decision to use China’s WTO accession date as a cut-off for identifying and measuring countervailable subsidies, failed to reasonably explain how the Maersk and Jianli freight rates included in the benchmark price for steel rounds and billets are both representative of what an importer would pay, erred in attributing subsidies received by Precision to the sales of Changbao’s other subsidiaries and in attributing subsidies received by four of TPCO’s subsidiaries to the sales of TPCO’s other subsidiaries, and failed to make a determination regarding whether the provision of steel rounds and billets at LTAR to TPCO were, tied to its sales of seamless steel pipe. Additionally, the court grants Defendant’s remand request for Commerce to recalculate its benchmark excluding the SBB East Asia pricing data. The court sustains Commerce’s decision in all other respects.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. ,§ 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c) (2006), which grant the court authority to review actions contesting the final determination in a countervailing duty investigation.. The court will uphold Commerce’s determination unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(l)(B)(i).

DISCUSSION

I. Commerce’s Decision to Defer Investigation of Certain New Subsidy Allegations Until First Administrative Review

Plaintiffs argue that both the relevant statute and regulations preclude Commerce from deferring its investigation of new subsidy allegations timely raised during the investigation. See TMK Mot. 12-17; Maverick Mot. 13-18; U.S. Steel Mot. 30-37. Defendant argues Commerce deferred its investigation in accordance with 19 U.S.C. § 1671a(b)(l) and 19 C.F.R. § 351.311(b) (2009), See Def. Resp. 76-83. The court finds that Commerce’s postponement of its investigation of new subsidies is in accordance with law and not an abuse of discretion.

If Commerce discovers a practice during the course of a countervailing duty proceeding which appears to be a countervail-able subsidy that was not alleged in the petition, Commerce “shall include the practice, subsidy, or subsidy program in the proceeding.” 19 U.S.C.- § 1677d(l). An interested party may submit new subsidy allegations during the course, of the investigation no later than “40 days before the scheduled date of the preliminary determination.” 19 C.F.R. § 351.301(d)(4)(i)(A). Commerce shall initiate an investigation where an interested party “alleges the elements necessary” along with “information reasonably available to the petitioner supporting those allegations.” 19 U.S.C. § 1671a(b)(l). Commerce investigates alleged subsidies meeting such requirements “if [it] concludes that sufficient time remains before the scheduled date for the final determination.” 19 C.F.R. § 351.311(b). Should Commerce find that insufficient time remains, it “defer[s] consideration of the newly discovered practice, subsidy, or subsidy program until a subsequent administrative review, if any.” 19 C.F.R. § 351.311(c).

On July 30, 2009, Petitioners timely submitted new subsidy allegations. Commerce initiated investigations into nine of the alleged subsidies. See Memorandum Regarding New Subsidy Allegations at 3-12, PD 209 (Sept. 18, 2009) (“New Subsidy Allegations Memo”). However, Commerce ultimately postponed its investigation of these newly alleged subsidies until the first administrative review because “the number and complexity of the newly alleged subsidies, and the short time the Department has to complete its investigation makes it impossible to conduct a meaningful examination of the subsidies validly alleged by petitioners.” Memorandum Regarding Status of New Subsidy Allegations at 6, PD 260 (Oct. 21, 2009) (“Status of New Subsidy Allegations”).

Commerce did not act contrary to law or abuse its discretion by postponing its investigation into the new subsidy allegations because it reasonably determined that there was insufficient time remaining to investigate the new subsidy allegations. An interested party may submit new subsidy allegations during the course of the investigation no later than “40 days before the scheduled date of the preliminary determination.” 19 C.F.R. § 351.301(d)(4)(i)(A). The plain meaning of this regulatory provision imposes a burden on the interested party to timely raise new subsidy allegations, but it does not require Commerce to investigate all timely raised allegations. This regulatory provision must be read together with 19 C.F.R. § 351.311(b) which obligates Commerce to investigate potentially countervailable subsidies first alleged during a proceeding if it “concludes that sufficient time remains before the scheduled date for the final determination.” 19 C.F.R. § 351.311(b). Commerce has discretion under the regulation to determine whether “sufficient time remains” in a proceeding to investigate new subsidy allegations. Id. Thus, the question is whether Commerce abused its discretion in determining that insufficient time remained in the proceeding to complete its investigation of the newly alleged subsidies. The court finds Commerce has not.

Commerce explained that the subsidy allegations cover complex subsidies requiring a laborious and difficult investigation. Status, of New Subsidy Allegations at 5. Commerce specifically determined that investigating the provision of land for LTAR is complicated because it requires “investi-gatfing] the pricing policies of the local government providing the land-use rights.” Id. Commerce added that even the more straightforward alleged subsidy programs were provided by different levels of the PRC government (e.g., national, regional, municipal), which would further add to the time necessary to develop a proper investigative record. Id. Commerce cited numerous tasks it would have had to complete in the short time remaining given that the deadline in the countervailing duty proceeding had not been aligned with the antidumping duty proceeding. Id. Commerce also relied on the fact the subsidies alleged had not previously been investigated. Id. at 5-6. Based on Commerce’s workload in the investigation, the number of new subsidy allegations, the complexity of those allegations, and the limited time period in which to complete its investigation, the court cannot say that Commerce unreasonably determined it lacked sufficient time to investigate these new subsidies.

Maverick argues that Commerce’s acceptance of a significant amount of new factual information submitted by the respondents at the “eleventh hour” contradicts its position that it lacked time to complete its investigation. Maverick Mot. 15. Maverick suggests that Commerce was required to investigate the new subsidy allegations rather than accepting and reviewing the new factual information. However, it is not appropriate for the court to substitute its judgment for the agency’s regarding the allocation of resources here. Torrington Co. v. United States, 68 F.3d 1347, 1351 (Fed.Cir.1995). Further, Commerce’s acceptance, of new factual information is not relevant to evaluating the reasonableness of Commerce’s determination that it lacked sufficient time to investigate new subsidies given their novelty and complexity.

TMK argues that Commerce acted contrary to its own practice by declining to investigate timely raised new subsidy allegations. TMK Mot. 16. TMK does not point to any case in which Commerce articulates such a practice, but instead asserts that it “can find no case in which the Department refused to investigate allegations that were timely under its regulations and that otherwise constituted proper subsidy allegations.” TMK Mot. 16. Even if Commerce has such a practice, it may provide a reasonable explanation for departing from it. See Save Domestic Oil, Inc. v. United States, 357 F.3d 1278, 1283-84 (Fed.Cir.2004) (citing Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). Commerce reasonably explained why there was insufficient time in this case to investigate the alleged subsidies even though the allegations were timely submitted.

11. Commerce’s Refusal to Investigate Certain New Subsidy Allegations

While Commerce deferred its investigation of the subsidies discussed above, Commerce declined to investigate other new subsidy allegations. Plaintiffs argue that Commerce’s refusal to investigate alleged export restraints on steel rounds and billets based on a heightened'initiation standard is contrary to law and, alternatively, unsupported by substantial evidence. See TMK Mot. 17-25; Maverick Mot. 19-23; U.S. Steel Mot. 37-42. TMK also argues that Commerce’s refusal to investigate land-use rights, a steel mill, and equipment allegedly provided to Changbao at LTAR is unsupported by substantial evidence and contrary to law. See TMK Mot. 25-32. Commerce’s refusal to investigate each of these alleged subsidies is supported by substantial evidence and in accordance with law.

A. Commerce’s Refusal to Investigate Alleged Export Restraints on Steel Rounds and Billets

An investigation into a particular subsidy program is warranted if an interested party, using information reasonably available to it, sufficiently alleges that: (1) a government or public authority has provided a financial contribution, (2) to a specific enterprise or industry, and (3) a benefit is conferred upon the recipient of the financial contribution. See 19 U.S.C. §§ 1671a(b)(l), 1677(5)-(5A). Upon receipt of an allegation, Commerce determines whether the petition alleges the necessary elements and contains information supporting the allegations. 19 U.S.C. § 1671a(c)(l)(A). Commerce applies the same standard to subsidies not raised in the petition that are alleged for the first time during the course of an investigation. See New Subsidy Allegations Memo at 2.

While export restraints are not 'financial contributions that directly provide goods or services at LTAE, such restraints may function in a manner that indirectly confers a benefit on producers. Commerce may countervail export restraints in these circumstances. See 19 U.S.C. § 1677(5)(B)(iii), (5)(D)(iii), (5)(E)(iv); see also 19 U.S.C. § 1671(a). Commerce has developed a practice of requiring petitioners to demonstrate a long-term correlation by presenting historical data before initiating an investigation into export restraints that allegedly constitute countervailable subsidies. See, e.g„ Leather From Argentina, 55 Fed. Reg. 40,212, 40,213-14 (Dep’t Commerce Oct. 2, 1990) (final affirmative countervailing duty determination and countervailing duty order); Certain Softwood Lumber Products from Canada, 57 Fed. Reg. 22,570, 22,604-605 (Dep’t Commerce May 28,1992) (final affirmative duty determination); Certain Hot-Rolled Carbon Steel Flat Products From Argentina, India, Indonesia, South Africa, and Thailand, 65 Fed. Reg. 77,580, 77,584 (Dep’t Commerce Dec. 12, 2000) (notice of initiation of countervailing duty investigations); Coated Free Sheet Paper from Indonesia, 72 Fed. Reg. 60,642 (Dep’t Commerce Oct. 25, 2007) (final affirmative countervailing duty determination).

Petitioners alleged that the Government of China’s (“GOC”) tax increase on exports of steel billets, including steel rounds, from fifteen percent to twenty-five percent, effective January 1, 2008, had the effect of substantially increasing the domestic supply of steel rounds in the first two months of 2008. Country-wide New Subsidy Allegations for the Provision of Steel Rounds for Less Than Adequate Remuneration at 2-6, PD 130 (July 30, 2009) (“Petitioners’ New Subsidy Allegations”). In an effort to establish a correlation between the export tax increase and the price decrease, Petitioners observed that from 2006 to approximately March 2008 “[s]teel billets exports fell 92.6 percent on an annual basis in the first two months of the year and were zero in the month of February.” Id. at 3. Petitioners additionally noted that, as a result of the dramatic decrease in exports, “world steel prices rose by 38.1 percent year on year to 221.9 points, compared with an increase in China’s domestic price index of 29.61 percent to 142.31 points.” Id. at 3-4. Petitioners therefore claimed that Chinese producers received a subsidy because the export tax had the effect of causing Chinese steel prices to increase at a-slower pace than the price increase for steel prices worldwide.

Commerce declined to investigate the alleged export restraints because the information does not show a sufficient relationship between the price difference and the export restraints. Final Decision Memo at 113. Specifically, Commerce referenced its practice in prior cases that it requires “long-term historical price comparisons that demonstrate[ ] a clear link between the imposition of the [restraint] and the divergence of prices” to investigate subsidy allegations arising from export restraint programs. Id.

Commerce’s determination not to investigate the Petitioners’ export restraint allegations is reasonable. Commerce’s practice required Petitioners to support their allegation of an indirect subsidy with long term historical pricing data, and Petitioners provided less than two years of data. Final Decision Memo at 113 (citing Leather From Argentina, 55 Fed. Reg. 40,212). “[I]n the case of an indirect subsidy, evidence of a causal nexus between the program and the benefit is also required.” AK Steel Corp. v. United States, 192 F.3d 1367, 1372 (Fed.Cir.1999). Petitioners were unable to offer the sort of long-term historical data that Commerce requires to sufficiently allege such a causal relationship. See Petitioners’ New Subsidy Allegations at 3-4. Thus, Commerce reasonably determined that Petitioners’ export restraint allegation failed to allege the necessary elements for the imposition of countervailing duties.

U.S. Steel argues that “since the export restraints in question had only-been in place since January 1, 2007, it is difficult to imagine how additional historical pricing information would have been at all relevant to the Department’s analysis.” U.S. Steel Mot. 40-41. Maverick echoes this argument, claiming that “domestic steel round and billet pricing in China was not consistently available prior to 2006.” Maverick Mot. 22. Commerce is not obligated to initiate an investigation based on speculative allegations, and U.S. Steel and Maverick point to nothing in the statute limiting Commerce’s discretion to set a reasonable threshold for demonstrating a causal relationship between an export restraint program and pricing trends. Commerce is required to “examine the accuracy and adequacy of the evidence provided in the petition,” 19 U.S.C. § 1671a(c)(l)(A), and establishing a causal nexus reasonably follows from that statutory mandate for indirect subsidy allegations. Notwithstanding the difficulty in obtaining supporting evidence, Commerce’s practice required Petitioners to sufficiently allege that the export tax functioned as a countervailable subsidy and to make some threshold showing of a causal relationship. Commerce found Petitioners failed to do so and reasonably declined to investigate the export restraints allegation.

B. Commerce’s Refusal to Investigate Land-Use Rights Allegedly Provided to Changbao for LTAR

TMK argues that Commerce’s refusal to investigate land-use rights allegedly provided to Changbao by the GOC at LTAR is unsupported by substantial evidence and. contrary to law. See TMK Mot. 25-29. Defendant disagrees because Commerce found TMK failed to allege that the land-use rights provided to Changbao were specific. See Def. Resp. 98-101.

A subsidy is considered specific, among other reasons, if it “is limited to an enterprise or industry located within a designated geographical region within the jurisdiction of the authority providing the subsidy,” or it is administered in a manner that indicates an enterprise or industry is favored over others. 19 U.S.C. § 1677(5A)(D)(iii)(IV)-(iv). TMK alleged during the course of the investigation that Changbao received land-use rights from the GOC for LTAR. See New Subsidies Allegations on Behalf of TMK IPSCO, V&M Star L.P., Wheatland Tube Corp., Evraz Rocky Mountain Steel, and the United Steelworks in the Countervailing Duty Investigation of Certain Oil Country Tubular Goods From the People’s Republic of China at 14, CD 31 (July 30, 2009) (“TMK New Subsidy Allegations re: Changbao”). In support of its allegation, TMK submitted information to show that Changzhou Baogang Steel Pipe Co., Ltd. (“Changzhou Baosteel”), the state owned enterprise (“SOE”) predecessor of Chang-bao, was given rights to land designated for industrial use by the Changzhou inu-nicipal government in Jiangsu Province. TMK New Subsidy Allegations re: Chang-bao at 14, Attachs. 11, 13.

Commerce reasonably refused to investigate the provision of land-use rights to Changbao for LTAR because TMK failed to allege that the program was specific. See Final Decision Memo at 124. TMK argued that, according to 19 U.S.C. § 1677(5A)(D)(iv), the land-use rights are specific to Changbao because it received the rights as a result of being located in the jurisdiction of the granting authority, the Changzhou municipal government. TMK New Subsidy Allegations re: Chang-bao at 15. After examining TMK’s allegation, Commerce found that TMK’s allegation only included information pertaining to the location of one of Changbao’s subsidiaries and failed to show that Changbao is located within the jurisdiction of the Changzhou municipal government. See Final Decision Memo at 124; see also New Subsidy Allegations at 7.

TMK also argued the land-use rights provided to Changbao are specific according to 19 U.S.C. § 1677(5A)(D)(iii)(IV) because the rights were valued at 63,542,750 renminbi by the government, but Chang-bao paid less than 3% of the value for such rights. TMK New Subsidy Allegations re: Changbao at 15. TMK submitted information showing that Changbao allegedly received land-use rights at less than the appraised value, however, TMK did not submit information to show that the government favored Changbao over other enterprises or industries in providing those land-use rights. Commerce reasonably found this allegation to be purely speculative because TMK failed to offer any support. See Final Decision Memo at 124; New Subsidy Allegations Memo at 7. Commerce’s determination not to investigate these subsidy allegations is reasonable because TMK failed to allege specificity.

C. Commerce’s Refusal to Investigate a Steel Mill and Equipment Allegedly Provided to Changbao for LTAR

TMK argues that Commerce’s refusal to investigate the alleged provision of a steel mill and equipment to Changbao by the GOC for LTAR is unsupported by substantial evidence and contrary to law. See TMK Mot: 29-32. In response, Defendant argues that Commerce correctly refused to investigate the alleged subsidy because TMK failed to sufficiently allege with supporting evidence that a benefit had been conferred upon Changbao. See Def. Resp. 96-98. The court agrees with Defendant.

TMK alleged during the course of the investigation that Changbao received a steel mill and equipment from the GOC for LTAR. See TMK New Subsidy Allegations re: Changbao at 6-7. To show that the GOC made a financial contribution that conferred a benefit upon Changbao, TMK alleged that Changzhou Baosteel obtained the mill and equipment when [[ ]] sold all its shares in Changzhou Baosteel to [[]] who then organized Changbao as a private company. See id. at '6 (citing Questionnaire Response of Jiangsu Changbao Steel Tube Co., Ltd. and Jiangsu Changbao Precision Steel Tube Co., Ltd. at 4, CD 22 (July 22, 2009) (“Changbao Questionnaire Response”)). TMK alleged that Changbao effectively received the steel mill and equipment at LTAR because “Changbao has provided no evidence that any price was paid for its predecessor’s assets” when Changbao was privatized. Id. at 7. After examining TMK’s allegation, Commerce found it insufficient on a prima facie basis. New Subsidy Allegations Memo at 13.

Commerce found that simply alleging privatization was insufficient to show that a benefit was conferred upon Changbao. See New Subsidy Allegations Memo .at 13; Final Decision Memo at 124. Commerce found that neither Changbao’s questionnaire response regarding the company’s history nor any other record evidence supports that Changbao did not pay for the mill and equipment. See Final Decision Memo at 124. TMK submitted no other information supporting its allegation. Therefore, Commerce reasonably determined that TMK’s allegation was purely speculative and insufficient to initiate an investigation.

III. Commerce’s Refusal to Identify and Measure Subsidies Prior to the Date China Acceded to the WTO

Plaintiffs challenge Commerce’s determination to uniformly apply the date of China’s accession to the WTO, he., December 11, 2001, as the earliest date it could identify and measure subsidies by the Chinese government in this countervailing duty investigation as contrary to law. See TMK Mot. 33-86; U.S. Steel Mot. 26-30; Maverick Mot. 34-42. Defendant argues that Commerce’s application of this uniform cut-off date is a reasonable exercise of its discretion to allocate investigative resources. See Def. Resp. 45^49. Commerce has failed to reasonably explain its adoption of a uniform cutoff date for the identification and measurement of subsidies.

Commerce arbitrarily picked China’s accession to the WTO as the date when economic conditions in China made subsidies identifiable and measurable. The statute requires that Commerce impose countervailing duties on merchandise from an NME country if subsidies can be identified and measured. See 19 U.S.C. § 1671(f)(l)-(2) (2012). Here, Commerce found that reforms in the years leading up to China’s WTO accession brought changes in the Chinese economy that permit it to identify and measure countervailable subsidies. Final Decision Memo at 62. Yet, Commerce articulates no relationship between China’s WTO accession date and China’s implementation of such reforms. In fact, Commerce acknowledged there “was not a single moment or single reform law that suddenly permitted [it] to find countervailable subsidies” in the Chinese economy. Id. at 53. Commerce also acknowledged the reform process “may take hold in some sectors of the economy or areas of-the country before others.” Id. at 54. None of the reforms Commerce identified occurred on the date of China’s- accession to the WTO.

Commerce has not explained why China’s accession- date was the first date where subsidies were identifiable and measurable, although the statute requires Commerce to countervail subsidies when they can be identified and measured. See 19 U.S.a § 1671(f)(1)—(2) (2012). Therefore, on remand Commerce must investigate each subsidy program and allocate subsidies beginning on the first daté it could identify and measure the subsidy considering the particular program in question and the impact of relevant economic reforms on that program. Administrative burden alone does not excuse Commerce of this statutory responsibility.

Defendant argues Commerce chose China’s WTO accession date because it corresponds to the time the most significant Chinese economic reforms occurred. Def. Resp. 48. However, Commerce identifies no specific economic reforms that occurred on that date. The only fact Commerce mentions that relates to China’s accession date is that China’s WTQ Accession Protocol contemplates application of the countervailing duty law. Final Decision Memo at 52. Commerce’s analysis indicates the reforms themselves, not China’s recognition that countervailing duty law applies to it, controls when Commerce can identify and measure subsidies. See id. Commerce also recognized" that many reforms, including the elimination of price controls on most products, were in place before China’s accession to the WTO. Id. at 54. Therefore, Commerce has not explained why China’s WTO accession date was the first date it could identify and measure subsidies in the Chinese economy.

IV. Benchmark Calculation for Steel Rounds and Billets

A. Inclusion of London Metal Exchange Benchmark Data

U.S. Steel and Maverick challenge Commerce’s determination to include the London Metal Exchange (“LME”) Far East and Mediterranean benchmark data in its benchmark calculation. U.S.' Steel Mot. 57-60; Maverick Mot. 32-34. Defendant counters that Commerce properly included the LME benchmarks in its benchmark calculations for steel rounds because there is no record evidence to support the notion that all reported steel round purchases were of OCTG-grade steel rounds. Def. Resp. 118. The court sustains Commerce’s determination.

Where goods are provided for LTAR, a benefit shall normally be treated as conferred upon the recipient. 19 U.S.C. § 1677(5)(E). If actual market prices are unavailable, Commerce will measure remuneration against “a world market price where it is reasonable to conclude that such price would be available to purchasers in the country in question,” Le., a tier two benchmark price. 19 C.F.R. § 351.51-l(a)(2)(ii). Commerce averages prices where there is more than one commercially available world market price, “making due allowance for factors affecting comparability.” Id.

Commerce included the LME benchmarks on the record in its benchmark calculation for steel rounds and billet. Final Decision Memo at 77. Commerce reasoned that it asked respondents to report purchases of all “steel rounds (e.g., billets, blooms) because petitioners alleged the terms “billets” and “rounds” were used interchangeably. Final Decision Memo at 77. Commerce included the LME benchmark because it included all purchases in its LTAE calculation. Id. Commerce’s regulation requires that it average all world benchmark data on the record to measure the adequacy of remuneration. See 19 C.F.R. § 351.511(a)(2)(ii). Neither U.S. Steel nor Maverick argue that the LME benchmark pricing is not commercially available to producers in China. Although Commerce’s regulation requires it to make allowance for factors affecting comparability in its benchmark calculation, see id., U.S. Steel and Maverick cite no authority requiring Commerce to exclude a commercially available benchmark price to measure the adequacy of remuneration for respondents’ purchases of steel inputs.

U.S. Steel and Maverick argue that Commerce erred in including the LME benchmarks in its average calculation because record evidence shows that LME data reflects standard commodity grade steel billets, which are not generally used to produce OCTG. U.S. Steel Br. 58; Maverick Br. 32. Commerce noted that it requested that respondents report purchases other than rounds used to produce OCTG “based on petitioners’ allegations that interchanged the terms ‘billets’ and ‘rounds.’ ” Final Decision Memo at 77.

U.S. Steel’s argument to exclude benchmark pricing that includes standard steel billets depends upon the assumption that respondents purchased only OCTG-grade steel rounds. If respondents used steel inputs that are included in the LME pricing data, then Commerce’s regulations require that it average all prices that are commercially available in the producing country. See 19 C.F.R. § 351.511(a)(2)(ii). None of the respondents’ questionnaire responses indicate that they produced solely OCTG. See TPCO Response to the Department of Commerce’s CVD Questionnaire at 8-9, PD 111 (July 21, 2009) (reporting TPCO produces mainly petroleum casing pipe, oil tubing, line pipes, boiler pipes, and mechanical pipes); Wuxi Seamless Oil Pipe Co. Ltd. CVD Questionnaire Response at 7, PD 112 (July 20,' 2009) (reporting Wuxi primarily produces OCTG and drill pipe, but also produces line pipe, tubes for perforating guns, plain-end pipes, heat insulated tubings, seamless pressure pipes used in high-pressure boiler, and other pipe products while an affiliate sells green pipe, high pressure boiler pipe, and drill pipe); Jianli Group’s Initial CVD Questionnaire Response at 25-26, PD 112 (July 21, 2009) (reporting Jianli’s billet purchases for production of OCTG and bearing tube). Although U.S. Steel asserts that the questionnaire responses indicate all respondents primarily produce seamless-pipe products, U.S. Steel cites no record evidence that the seamless-pipe products respondents reported producing require only OCTG-quality rounds or that the products included in the LME benchmarks cannot be used to make such products. Neither U.S. Steel nor Maverick cite any record evidence that made it unreasonable for Commerce to conclude that respondents purchased products other than OCTG-quality billets.

U.S. Steel also argues that Commerce’s justification for including the LME benchmarks data fails to justify its determination to include benchmarks reflecting standard commodity billets because the only non-OCTG quality rounds reported by respondents were seamless pipe quality rounds.- U.S. Steel Mot. 59. Although U.S. Steel correctly notes that the record does not contain evidence that respondents reported steel rounds not used for seamless price production, id. U.S. Steel points to no record evidence detracting from the notion that the steel billets included in the LME benchmark pricing could be used in seamless pipe production.

U.S. Steel also argues Commerce erred in using the LME benchmark data because the LME data reflects only prices for square steel billets used to produce concrete reinforcing bar (“rebar”), which is not used in the production of OCTG. U.S. Steel Mot. 58 (citing TPCO Submission of New Factual Information at Attach. 2 at 5, 8); U.S. Steel Suppl. Br. at 23. U.S. Steel supports its argument that LME prices are for rebar citing statements in the LME publication that LME prices are for “the most commonly traded grade” of steel billet material and that there is a “high level of price correlation” between LME prices and rebar prices. U.S. Steel Mot. 58 (citing TPCO Submission of New Factual Information at Attach. 2 at 5, 8). However, it does not follow from either statement that LME pricing only reflects rebar prices.

B. Inclusion of SBB “East Asia” Benchmark Data

U.S. Steel and Maverick also challenge Commerce’s decision to include the Steel Business Briefing (“SBB”) benchmark data on monthly export prices for billets from East Asia in its benchmark calculation for the provision of steel rounds and billets. See U.S. Steel Mot. 55-57; Maverick Mot. 30-32. Defendant requests remand for Commercé to recalculate the benchmark without the SBB East Asia data. See Defl’s Resp. 116. The court grants Defendant’s request for remand.

The court has discretion to grant a remand request when Commerce wishes to reconsider its previous position without confessing substantive error. See SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed.Cir.2001). Generally, a request for a “remand due to substantial and legitimate agency concerns should be granted.” Timken Co. v. United States, 38 CIT —, -, Slip Op. 14-51, at *5, 2014 WL 1760033 (May 2, 2014) (citing SKF USA Inc., 254 F.3d at 1029). Commerce has substantial and legitimate concerns if (1) there is a compelling justification for remand, (2) that justification is not outweighed by the need for finality, and (3) the scope of the requested remand is appropriate. Ad Hoc Shrimp Trade Action Comm. v. United States, 37 CIT -, 882 F.Supp.2d 1377, 1381 (2013).

Here, Defendant’s request for remand satisfies the three-prong test, and Commerce’s concerns are substantial and legitimate. First, a remand request for Commerce to correct a potentially erroneous calculation of countervailing duty rates is a compelling justification. Cf. Baroque Timber Industries (Zhongshan) Co. v. United States, 37 CIT -, -, 925 F.Supp.2d 1332, 1339 (2013) (citing Parkdale Int’l v. United States, 475 F.3d 1375, 1380 (Fed.Cir.2007)). Second, the need for finality in this case does not outweigh the need to calculate accurate countervailing duty rates, particularly because Maverick and U.S. Steel seek remand on this very issue. Moreover, no party objects to Defendant’s request. Third, the scope of Defendant’s remand request is appropriate for the issue. Accordingly, Defendant’s remand request is based on a substantial and legitimate concern, and it is therefore granted.

C. Comparability Adjustment to the Benchmark Calculation

Plaintiffs argue that Commerce was required to adjust the benchmark prices to reflect the higher value of OCTG-quality steel rounds used in the production of subject merchandise. See TMK Mot. 25; U.S. Steel Mot. 47-53; Maverick Mot. 24-29. Defendant responds that Commerce properly declined to make a premium quality adjustment because all purchases of steel rounds by producers were included in its benefit calculations, not just those for premium quality steel rounds. See Def. Resp. 120. Commerce’s decision not to adjust the benchmark prices to reflect premium quality steel rounds is reasonable.

To determine whether a benefit is conferred, Commerce determines the adequacy of remuneration relative to prevailing market conditions for the good being provided in the country which is subject to the investigation. 19 U.S.C. § 1677(5)(E)(iv). “Prevailing market conditions include price, quality, availability, marketability, transportation, and other conditions of purchase or sale.” 19 U.S.C. § 1677(5)(E). Commerce’s regulations also provide that Commerce shall make allowance for factors affecting comparability in its benchmark calculation. 19 C.F.R. § 351.511(a)(2)(ii).

Commerce recognized that some steel products purchased by Chinese producers are OCTG-grade products, but it included all steel purchases in its benefit calculation because respondents reported all steel billet purchases regardless of the ultimate product they were used to produce. See Final Decision Memo at 78. Commerce found it would be inappropriate to adjust the benchmark to reflect only premium-quality steel purchases where Commerce must measure the adequacy of remuneration for all steel purchases, not just OCTG-grade steel round purchases. Id. Although U.S. Steel and Maverick argue that all of the products respondents reported producing also require steel rounds of higher quality than those included in the benchmarks used here, no record evidence supports that assertion. Therefore, Commerce reasonably concluded that it could not inflate all benchmark prices to reflect premium-quality products.

U.S. Steel and Maverick argue that the statute and the regulations require Commerce to adjust for premium quality rounds because seamless pipe quality rounds are premium steel products that are not similar or commercially interchangeable with the products included in the SBB or LME benchmarks, which reflect lower value commercial quality steel billets. U.S. Steel Mot. 49-50; Maverick Mot. 32-33. They further argue that Commerce’s practice is to select benchmarks that are comparable in physical characteristics and that are commercially interchangeable with the government-provided input. U.S. Steel Mot. 47; Maverick Mot. 23. Nothing in the petition indicates that the GOC program provided only OCTG-quality steel rounds to Chinese producers. The petition defined steel rounds for the production of ÓCTG broadly to include “round steel billets,” “round billets,” or simply “billets” without reference to any specific quality grades or physical or chemical properties. See Petition at 23 n. 263. Defendant does not contest that the benchmarks used by Commerce reflected products other than OCTG-quality billet. However, neither U.S. Steel nor Maverick point to any record evidence that the GOC provided only OCTG-quality billet to producers of subject merchandise. Therefore, Commerce reasonably declined to adjust the benchmark to reflect only premium-quality goods.

U.S. Steel and Maverick also argue that Commerce had no basis to conclude respondents reported steel rounds or billets that were not used to produce OCTG. U.S. Steel Mot. 50; Maverick Mot. 28. First, U.S. Steel and Maverick argue that, by instructing the companies to report “ ‘steel rounds (e.g. billets, blooms) purchased] for the production of the subject merchandise during the POI’ ” in its questionnaire, Commerce only requested that respondents report OCTG-quality steel rounds. U.S. Steel Mot. 50 (quoting Countervailing Duty Questionnaire at Section III at Question S, PD 72 (June 4, 2009) (“CVD Questionnaire”)); Maverick Mot. 28 (citing CVD Questionnaire at Question S). Commerce noted that it did not limit its request to respondents’ purchases to OCTG-grade product because the allegation in the petition “interchanged the terms ‘billets’ and ‘rounds.’ ” Final Decision Memo at 77. U.S. Steel and Maverick argue that the petition and Commerce’s questionnaire were framed narrowly, but that interpretation is belied by the broad wording of the petition and by Maverick’s specific request that Jianli report all purchases of steel rounds regardless of the product the rounds were being used to produce. See Petition at 23 n. 263; Maverick Deficiency Comments Regarding Jianli’s July. 20, 2009 Countervailing Duty Questionnaire Responses at 20, PD 127 (July 30, 2009). Respondents reported purchasing inputs for non-OCTG products. See Changbao Steel Round Purchases (stating Changbao reported purchases of all steel rounds, not only those used in production of OCTG); Wuxi Revised Appendix 5 at 2 (stating Wuxi reported all billet purchases, not just those used for production of subject merchandise and that billet purchase information is not segregated based on finished product); TPCO Steel Round Purchases (stating TPCO reported purchases of all steel rounds, not only those used in production of OCTG); Jianli Group First Supplemental Questionnaire Response at 10, PD 161 (Aug. 21, 2009) (including Jianli’s purchases for production of core rod and bearing tube purchases in addition to purchases used in the production of OCTG). Petitioners cannot have it both ways. Since they requested that Commerce frame the investigation of the benefit conferred broadly, Commerce had to measure the benefit conferred by the whole program, not just that conferred by the highest quality inputs.

Second, U.S. Steel and Maverick argue that Commerce had no basis to conclude that respondents reported purchasing a variety of steel billets. U.S. Steel Mot. 51; Maverick Mot. 28-29.. U.S. Steel argues that information obtained at verification indicates respondents purchased high-quality rounds. U.S. Steel Mot. 51-52. However, their argument is based on an assumption that all seamless steel products require premium quality steel rounds. Neither U.S. Steel nor Maverick point to any record evidence that all seamless tube products respondents reported producing require OCTG-grade steel rounds or that the seamless pipe products produced by respondents require similar quality inputs to those used to produce OCTG.

D. Ocean Freight Adjustments to the Benchmark Calculation

U.S. Steel challenges Commerce’s freight adjustments to the benchmark calculation for steel rounds and billets to reflect delivery charges, including Commerce’s decision to use a freight quote from Jianli’s freight provider and its decision to exclude a special equipment surcharge from the Maersk freight rate. See U.S. Steel' Mot. 60-65. Defendant argues that U.S. Steel’s arguments regarding the inclusion of Jianli’s freight quote are “mere conjecture” and Commerce reasonably excluded the surcharge for using flat rack containers from the Maersk data because importers of steel rounds and billets would not necessarily pay such a charge to import steel rounds and billets. See Def. Resp. 122-23. Commerce’s decision to exclude the special equipment surcharge is reasonable, but Commerce must reconsider or further explain its decision to use an average of the Jianli freight quote and the Maersk data to adjust the benchmark calculation for freight costs.

Commerce adjusts its world market benchmark price for ocean freight costs “to reflect the price that a firm actually paid or would pay if it imported the product.” 19 C.F.R. § 351.511(a)(2)(iv). Commerce’s regulations neither require nor preclude Commerce from averaging freight costs when adjusting the world market benchmark for import costs. 19 C.F.R. § 351.511(a)(iv). Therefore, Commerce has broad discretion in determining how to adjust the world market benchmark price to reflect freight costs incurred by purchasers so long as it does so reasonably. Here, Commerce has not done so reasonably. In the preliminary results, Commerce adjusted the benchmark price for steel rounds and billets to include ocean freight costs a company would incur to import products to China based on pricing data from the international shipping line Maersk. See Prelim. Results, 74 Fed. Reg. at 47,219; see also U.S. Steel Pre-Preliminary Comments at Exs. 6-10, PD 164 (Aug. 25, 2009) (“U.S. Steel Pre-Prelim. Comments”). Jianli subsequently submitted a price quote from its freight forwarder for shipping steel rounds and billets to China. See Jianli Group’s Submission of Factual Information at Attachs. 1-2, PD 230 (Oct. 5, 2009) (“Jianli Freight Quote”). Commerce found that the two freight rates reflect what a company would have paid to import the merchandise and used an average of the Jianli freight quote and the Maersk data to adjust the benchmark for ocean freight costs. Final Decision Memo at 84-85,

Commerce included the Jianli freight quote and continued to use the Maersk data because it found both “reflective of what an importer would have paid to import steel rounds.” Final Decision Memo at 84. Commerce rejected Jianli’s argument to exclude the Maersk data, stating “so long as the ocean freight costs are reflective of market rates for ocean freight, and representative of the rates an importer— and' not necessarily the respondent specifically—would have paid, then the prices are appropriate to include in our benchmark.” Id, at 85. Implicit in Commerce’s reasoning is that it is inappropriate to include unrepresentative data in the benchmark. Commerce found both freight rates to be representative because the record lacked information that would lead it “to question the accuracy of these submitted ocean freight rates.” Id. at 84. However, a simple comparison of the two quotes undermines the representativeness of one of them.

Both of the rates offered ocean freight costs for each month during the period Of the investigation from the same origin locations, yet the two freight rates widely differ. During the period of investigation, the Jianli freight quote ranged from $290-$540 per container, see Jianli Freight Quote at Attach. 2, whereas the Maersk data ranged from $2,705.12-$3,821.96 per container. See U.S. Steel Pre-Prelim. Comments at Ex. 1 at Figure 2. This price comparison is based on the two rates without the adjustments Commerce had made in its final calculations, however, the price disparity remained significant even with those adjustments. After Commerce’s final adjustments, the Jianli freight quote ranged from $510-$860 per container, see Jianli Freight Quote at Attach. 2, and the Maersk data- ranged from $909.09-$2,197.62 per container during the period of investigation. See id. No matter how the two rates are compared, whether adjusted or unadjusted, there is a considerable price difference that calls into question the representativeness of the rates. However, at no point did Commerce address this price disparity. Although Commerce bases its decision on the representativeness of both rates, it failed to explain how such different rates are each representative, and thus reflect the price a firm actually paid or would pay if it imported the product as required by 19 C.F.R. § 351.511(a)(iv). On remand, Commerce must explain how Jianli’s freight quote and the Maersk data represent the costs, a company would have paid to import the merchandise despite their significant price differences in order to continue using an average of both rates or reconsider its freight adjustment.

However, Commerce’s decision to exclude the special equipment .surcharge from the freight adjustment is reasonable. Commerce excluded .the flat rack charge because Jianli’s freight provider’s statement indicated that a company would not necessarily pay the flat rack charge to import steel rounds and billets. Final Decision Memo at 85 (citing. U.S. Steel Pre-Prelim. Comments at Exs. 5, 12; Jianli Freight Quote at Attach. 1 ¶ 5). U.S. Steel submitted information stating that the “[cjommodities commonly shipped in the flat rack container include machinery, industrial boilers, tractors, parts packed in cases, steel tubes, steel pipes, steel bars and cables” and that flat rack containers are “ideal for items such as heavy machinery pipes and boats.” U.S. Steel Pre-Prel-im. Comments at Exs. 5, 12. However, Commerce found the information submitted by U.S. Steel pertained to finished or high-quality steel products, not steel rounds and billets. Final Decision Memo at 85. U.S. Steel points to no record evidence detracting from this finding. Thus, Commerce reasonably excluded the special equipment surcharge from the Maersk data because the record only contained information indicating that flat rack containers were not used to ship steel rounds and billets.

U.S. Steel contends that it is Commerce’s practice to include all of the itemized shipping costs in the Maersk data in determining freight costs. U.S. Steel Mot. 60 (citing U.S. Steel Pre-Prelim. Comments at Exs. 2-8). Yet; U.S. Steel’s argument fails to show that Commerce’s practice is to use all of the costs reported by Maersk even in the face of record evidence that a company would not necessarily pay for one of the itemized costs in the Maersk rate. Commerce reasonably used the Maersk data here only to the extent that those costs reflected costs to import steel rounds and billets.

U.S. Steel argues that Commerce’s reliance on the freight quote and accompanying affidavit submitted by Jianli to exclude flat rack fee is inappropriate because, while Jianli’s freight provider might not use flat rack containers to ship steel rounds and billets, other shippers would impose such a charge. U.S. Steel Reply 19-20. However,. Commerce found that the only pertinent evidence on the record regarding the use of flat rack containers to ship steel rounds and billets indicated that a shipper would not use them and thus a company would not pay a premium to ship such goods. Pinal Decision Memo at 85. U.S. Steel heavily relies upon its submissions which state that flat rack containers are used to ship “machinery, industrial boilers, tractors, parts packed in cases, steel tubes, steel pipes and cables,” and that flat rack containers are “ideal for items such as heavy machinery pipes and boats.” U.S. Steel Pre-Prelim. Comments at Exs. 5, 12. However, Commerce found that this information discusses the use of flat rack containers for finished or high-quality goods and is not reflective of costs to transport steel rounds and billets. Final Decision Memo at 85. U.S. Steel is unable to point to any record evidence that refutes Commerce’s finding. U.S. Steel asserts its information showed that flat rack containers are used to ship heavyweight cargo and not only finished or high-quality merchandise. U.S. Steel Mot. 62. Based upon the goods mentioned in the information submitted by U.S. Steel, the court cannot say that it was unreasonable for Commerce to infer that flat rack containers are used to ship finished or high-quality merchandise.

U.S. Steel argues that Commerce lacked substantial evidence to exclude the flat rack charge because “there is no evidence that Maersk Lines would ship steel rounds to China by flat rack container without requiring customers to pay the special equipment surcharge,” U.S. Steel Mot. 62. Commerce did not find that Chinese shippers did not charge Chinese producers a premium to use flat rack containers, but rather that those shippers did not necessarily use flat rack containers to ship steel rounds and billets to China. See Final Decision Memo at 85. U.S. Steel cites to RZBC Grp. Shareholding Co. v. United States, 39 CIT -, - - -, 100 F.Supp.3d 1288, 1312-1313 (2015), where the court affirmed the inclusion of Maersk’s special equipment surcharge in calculating shipping costs to China. U.S. Steel Suppl. Br. 25. However, the record in that case contained no evidence that producers did not pay an equipment surcharge. RZBC Grp., 39 CIT at -, 100 F.Supp.2d at 1312. Here, Jianli submitted information from its freight provider stat-tag that it did not use flat rack containers to ship steel rounds and billets to China. In RZBC Grp., the court did not hold Commerce must include a flat rack surcharge where no evidence in the record indicates producers paid such a charge. See id. at - -, 100 F.Supp.2d at 1312-13. Therefore, Commerce’s decision to exclude the special equipment surcharge from the Maersk data is reasonable.

V. Attribution of Subsidies

TMK and U.S. Steel argue that Commerce incorrectly calculated the ad valo-rem subsidy rates for Changbao and TPCO. See TMK Mot. 35-40; U.S. Steel Mot. 13-26; U.S. Steel Suppl. Br. 4-10. Commerce’s decision to allocate subsidies received by Changbao and TPCO to the sales of each of their subsidiaries in addition to their own sales is in accordance with law. However, Commerce acted contrary to law in attributing the subsidies received by Precision to the sales of Changbao’s other subsidiaries and attributing the subsidies received by four of TPCO’s subsidiaries to the sales of TPCO’s other subsidiaries. Further,- Commerce failed .to reasonably explain its decision not to tie the provision of steel rounds and billets at LTAR only to TPCO’s sales of seamless steel pipe,

A. Attribution of Subsidies Received by a Parent Company

TMK and U.S. Steel argue that Commerce incorrectly attributed the subsidies received by Changbao to the consolidated sales of Changbao and its subsidiaries without additionally investigating the subsidies received by Changbao’s subsidiaries. See TMK Mot. 35-36; U.S. Steel Mot. 24-26. U.S. Steel additionally argues that Commerce made the same error in attributing the subsidies received by TPCO to its own sales as well as the sales of its subsidiaries. See U.S. Steel Mot. 13-19. Defendant responds that Commerce’s allocation of subsidies received by Changbao and TPCO is reasonable and in accordance with law. See Def. Resp. 99-105.

In general, Commerce “calculate^] an ad valorem subsidy rate by dividing the amount of the benefit allocated to the period of investigation ..... by the . sales value during the same period of the product or products to which [Commerce] attributes the subsidy.” 19 C.F.R. § 351.525(a). Commerce ordinarily divides the subsidies received by a company only by the sales of that company, even if there is cross-ownership between corporations. See 19 C.F.R. § 351.525(b)(6)(i). However, Commerce’s regulations provide an exception to its default attribution rule .if . the company that receives a subsidy is a holding or parent company. 19. C.F.R. § 351.525(6)(b)(iii). Where a holding or parent company receives a subsidy and does not merely serve as a conduit for transferring the subsidy to a subsidiary, Commerce attributes the subsidy not only to the holding or parent company’s own sales, but also to the sales of its subsidiaries.

Commerce’s decision to attribute the subsidies received by Changbao and TPCO to each of their sales as well as the sales of each of their subsidiaries is reasonable. Attributing subsidies received by a parent company to the sales of its subsidiaries is not conditioned upon the parent company reporting, or. Commerce additionally investigating, subsidies received by its subsidiaries. See 19 C.F.R. § 351.525(b)(6)(iii). TMK and U.S. Steel point to no authority that supports its assertions that restrict the application of 19 C.F.R. § 351.525(b)(6)(iii) beyond the conditions expressed in the provision.

With respect to Changbao, Commerce learned at verification that Changbao’s reported sales reflected not only its own sales, but also the sales of all of its subsidiaries. See Final Decision Memo at 8 (citing Jiangsu Changbao- Steel Tube Co., Ltd. arid Jiangsu Changbao Precision Steel Tube Co., Ltd. Verification Report at 6, PD 268 (Oct. 29, 2009)), Because Commerce found that Changbao is a parent company, Commerce attributed the subsidies received by Changbao to the consolidated sales of Changbao and its subsidiaries pursuant to 19 C.F.R. § 351.525(b)(6)(iii). Id. Likewise, TPCO’s reported sales included its own sales and the sales of all of its subsidi