(a) Introduction—(1) The nonmarket economy entity. When the Secretary determines that a country is a nonmarket economy country in an antidumping proceeding pursuant to section 771(18) of the Act, the Secretary may determine that all entities located in that nonmarket economy country are subject to government control and thus part of a single, government-controlled entity, called the nonmarket economy entity.

(2) The nonmarket economy entity rate. All merchandise from the nonmarket economy exported to the United States and subject to an antidumping proceeding by entities in the nonmarket economy determined by the Secretary on the basis of record information to be part of the government-controlled entity may be assigned the antidumping cash deposit or assessment rate applied to the government-controlled entity. That rate is called the nonmarket economy entity rate.

(3) Entities in third countries owned or controlled by the nonmarket economy government. If a nonmarket economy government has direct ownership or control, in whole or in part, of an entity located in a third country and that entity exports subject merchandise to the United States, the Secretary may determine on the basis of record information that such an entity is part of the government-controlled entity and assign that entity the nonmarket economy entity rate.

(b) Separate rates. An entity exporting merchandise to the United States from a nonmarket economy may receive its own rate, separate from the nonmarket economy entity rate, if the Secretary determines that the exporter has demonstrated that it operates certain activities sufficiently independent from nonmarket economy government control to justify the application of a separate rate. In determining whether an entity operates certain activities sufficiently independent from government control to receive a separate rate, the Secretary will normally consider the following:

(1) Nonmarket economy government ownership and control in the nonmarket economy—(i) Government control through ownership. When a nonmarket economy government, at a national, provincial, or other level, holds an ownership share of an entity located in the nonmarket economy, either directly or indirectly, the level of ownership and other factors may indicate that the government exercises or has the potential to exercise control over an entity's general operations. No separate rate will be applied when the nonmarket economy government either directly or indirectly holds:

(A) A majority ownership share (over fifty percent ownership) of an entity; or

(B) An ownership interest in the entity of fifty percent or less and any one of the following criteria applies:

(1) The government's ownership share provides it with a disproportionately larger degree of influence or control over the entity's production, commercial, and export decisions than the ownership share would normally entail, and the Secretary determines that the degree of influence or control is significant;

(2) The government has the authority to veto the entity's production, commercial and export decisions;

(3) Officials, employees, government-appointed or government-controlled labor union members, representatives of the government, or their family members have been appointed as officers or managers of the entity, members of the board of directors, or other governing authorities in the entity that have the ability to make or influence production, commercial and export decisions for the entity; or

(4) The entity is obligated by law or its foundational documents, such as articles of incorporation, or other de facto requirements to maintain one or more officials, employees, government-appointed or government-controlled labor union members, or representatives of the government as officers or managers, members of the board of directors, or other governing authorities in the entity that have the ability to make or influence production, commercial and export decisions for the entity.

(ii) Absence of de jure government control. If an entity demonstrates that neither § 351.108(b)(1)(i)(A) nor (B) applies to the entity, the entity must then demonstrate that the government has no control in law (de jure) of the entity's export activities. The following criteria may indicate the lack of government de jure control of the entity's export activities:

(A) The absence of a legal requirement that one or more officials, employees, government-appointed or government-controlled labor union members, or representatives of the government serve as officers or managers of the entity, members of the board of directors, or other governing authorities in the entity that make or influence export activity decisions;

(B) The absence of restrictive stipulations by the government associated with an entity's business and export licenses;

(C) Legislative enactments decentralizing government control of entities; and

(D) Other formal measures by the government decentralizing control of companies.

(iii) Absence of de facto government control. If the entity demonstrates that § 351.108(b)(1)(i)(A) and (B) and (b)(1)(ii) do not apply to the entity, the entity must then demonstrate that the government has no control in fact (de facto) of the entity's export activities. The following criteria may indicate de facto government control of the entity's export activities:

(A) Whether the entity maintains or must maintain one or more officials, employees, representatives of the government, or their family members as officers or managers, members of the board of directors, or other governing authorities in the entity which have the ability to make or influence export activity decisions;

(B) Whether export prices are set by or are subject to the approval of a government agency;

(C) Whether the entity has authority to negotiate and sign contracts and other agreements without government involvement;

(D) Whether the entity has autonomy from the government in making decisions regarding the selection of its management;

(E) Whether the entity retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses; and

(F) Whether there is any additional evidence on the record suggesting that the government has direct or indirect influence over the entity's export activities.

(2) Nonmarket economy government ownership or control of an entity located in a third country. If the Secretary determines that a nonmarket economy government owns or controls, in whole or in part, an entity located in a third country, the Secretary may determine on the basis of record information that the entity should be assigned the nonmarket economy entity rate or that the entity should be granted a separate rate.

(c) Entities wholly owned by foreign entities incorporated and headquartered in a market economy. In general, if the Secretary determines based on information submitted in a separate rate application or certification that an entity exporting merchandise subject to a nonmarket economy country antidumping proceeding is wholly owned by a foreign entity and both incorporated and headquartered in a market economy country or countries, then the Secretary will consider the entity independent from control of the nonmarket economy government and an analysis under paragraph (b) of this section will not be necessary.

(d) Separate rate applications and certifications. In order to demonstrate separate rate eligibility, an entity subject to a nonmarket economy country antidumping proceeding will be required to timely submit a separate rate application, as made available by the Secretary, or a separate rate certification, as applicable. If no separate rate application or certification is timely submitted, the Secretary may apply the nonmarket economy entity rate to merchandise exported to the United States and subject to the nonmarket economy country antidumping proceeding. In filing a separate rate application or certification, the following applies:

(1) In an antidumping investigation, the entity will normally file a separate rate application on the record of the investigation no later than twenty-one days following publication of the notice of initiation in the Federal Register;

(2) In a new shipper review or an administrative review in which the entity has not been previously assigned a separate rate, the entity will normally file a separate rate application on the record no later than fourteen days following publication of the notice of initiation in the Federal Register. In both new shipper reviews and administrative reviews, documentary evidence of an entry of subject merchandise for which liquidation was suspended during the period of review must accompany the separate rate application.

(3) In an administrative review, if the entity has been previously assigned a separate rate in the proceeding, no later than fourteen days following publication of the notice of initiation in the Federal Register, the entity will instead file a certification on the record in which the entity certifies that it had entries of subject merchandise for which liquidation was suspended during the period of review and that it otherwise continues to meet the criteria for obtaining a separate rate. If the Secretary determined in a previous segment of the proceeding that certain exporters and producers should be treated as a single entity for purposes of the antidumping proceeding, then a certification filed under this paragraph must identify and certify that that the certification applies to all of the companies comprising that single entity.

(e) Examined respondents and questionnaire responses. Entities that submit separate rate applications or certifications and are subsequently selected to be an examined respondent in an investigation or review by the Secretary must fully respond to the Secretary's questionnaires and participate in the antidumping proceeding in order to be eligible for separate rate status.