The principal consequence of the Commerce Department identifying the targeted country as an NME and refusing to recognize the target industry as an market-oriented industry is that the Commerce Department presumes that all companies in an NME country are subject to the NME country's control and, consequently, that these companies' prices and costs cannot be used in the Commerce Department's AD margin calculations.

Under this theory, in NME cases, the government is the official respondent, and therefore the Commerce Department calculates a single, country-wide AD margin. Under United States law, this single, country-wide AD margin applies to all NME exporters except those NME companies that can demonstrate that their export activities are legally and functionally independent of the NME government's control. Such demonstration is referred to as obtaining 'separate rate status'. A company that obtains separate rate status will not be subjected to the single country-wide rate (which is always very high) but rather will receive either its own calculated AD margin or a weighted average of all company-specific individually calculated AD margins that were calculated.

To obtain separate rate status the NME exporter must demonstrate that its export activities are not controlled by the government of the NME country. The NME exporter must show its commercial independence on both a legal (`de jure') and factual (` de facto') basis.

In order to determine whether an NME country's laws allow a company to operate independently (the de jure analysis), the Commerce Department typically considers several factors such as:

- Whether there are any restrictions on the company's business and export licenses;

- Whether there exist any legislative enactments decentralizing control of companies in the NME; and

- Whether any other formal measures by the government decentralize control of NME companies' commercial operations.

- To determine whether the facts of a particular case support a conclusion that an NME company operates independently of the NME government (the de facto analysis), the Commerce Department analyses the following criteria:

- Whether the NME company's export prices are set by or subject to government approval;

- Whether the NME exporter has the authority to negotiate and sign contracts;

- Whether the NME exporter selects its own management;

- Whether the NME exporter retains the proceeds of its exports sales; and

- Whether the NME exporter independently decides how to use its profits or how to finance its losses.

If an NME exporter demonstrates both legal and factual absence of government control, it will be entitled to separate rate status. If the NME exporter is one of the larger exporters and therefore is selected by the Commerce Department to be a mandatory respondent, separate rate status means that the NME exporter will receive its own anti-dumping margin. If the NME exporter is not chosen as a mandatory respondent, but does receive separate rate status, the NME exporter will receive an AD margin equal to a weighted average of those AD margins received by the mandatory respondents that are above 2% (the legal threshold for de MillilniS) and that are not based on total 'facts available' punishment for not cooperating). If, however, the Commerce Department finds either legal or factual government control over the exporter's commercial activities, the NME exporter will not be entitled to separate rate status but rather will receive an AD margin equal to the country-wide dumping margin.

Source: Business Guide to Trade Remedies in the United States: Anti-dumping, countervailing and safeguards legislation practices and procedures