Allegheny Ludlum Corp. v. United States
Consol. Court No. 99-06-00369 (CIT December 28, 2000)
The Department of Commerce has prepared these final results of redetermination pursuant to the remand order of the Court of International Trade in Allegheny Ludlum Corp. v. United States, Consol. Court No. 99-06-00369 (CIT December 28, 2000). In accordance with the Court's instructions, we have re-examined and recalculated, in part, certain contested aspects of the Final Determination of Sales at Less than Fair Value: Stainless Steel Plate in Coils From Taiwan, 64 Fed. Reg. 15,493 (March 31, 1999). Specifically, we have reconsidered our determination to apply separate cash deposit rates for U.S. sales made directly by Yieh United Steel Corporation ("YUSCO") and those sales made by YUSCO through Ta Chen Stainless Pipe Co., Ltd. ("Ta Chen"). We received interested party comments to our draft remand results on March 2, 2001.
On March 31, 1999, the Department published Final Determination of Sales at Less than Fair Value: Stainless Steel Plate in Coils From Taiwan, 64 FR 15,493 ("Final Determination") covering the period of investigation ("POI") January 1, 1997 through December 31, 1997. This investigation involved one Taiwanese producer/exporter, YUSCO, and a Taiwanese middleman, Ta Chen. Both YUSCO and domestic producers of the like product (Armco, Inc., J&L Specialty Steel, Inc., Lukens, Inc., North American Stainless, United Steelworkers of America, AFL-CIO/CLC, Butler Armco Independent Union, Zanesville Armco Independent Organization, Inc. (collectively "Domestic Producers" or "Petitioners")) contested various aspects of the Final Determination.
On December 28, 2000, the Court issued confidential slip opinion 00-170 in Allegheny Ludlum Corp. v. United States, Consol. Court No. 99-06-00369 ("Allegheny"). In its decision, the Court remanded one aspect of the Final Determination. Regarding the Department's decision to issue separate cash deposit rates for sales made by YUSCO and those made by YUSCO through the middleman, Ta Chen, the Court ordered the Department to reconsider this determination in light of 19 C.F.R. 351.107(b) (1999). See Allegheny at 8-12.
We have reconsidered our determination in light of 19 C.F.R. 351.107(b) and determine that separate channel-specific rates are not appropriate in this case. Specifically, section 351.107(b) of the Department's regulations codifies our ability to issue channel rates in certain circumstances stating:
In the case of subject merchandise that is exported to the United States by a company that is not the producer of the merchandise, the Secretary may establish a "combination" cash deposit rate for each combination of the exporter and its supplying producer(s).
The preamble to these regulations, which discusses our position on issuing channel rates in different factual scenarios, notes that we do not generally find it appropriate to determine channel rates when investigating producers. See Antidumping and Countervailing Duties; Final Rule, 62 FR 27296, 27302-3 (May 19, 1997) ("Preamble"). Thus, our general practice is not to issue channel-specific rates and we will only do so in "unusual circumstances." Id. Moreover, upon reconsideration, we determine that the unique determinations in the instant case lend themselves to issuing a single weighted-average margin.
In a less-than-fair-value ("LTFV") investigation, we make two unique determinations: a determination whether sales are made at LTFV, and a determination whether a producer should be excluded from a subsequent order based on a de minimis margin. In the instant case, we also are determining whether middleman dumping has occurred. In a middleman scenario, an unaffiliated party in the home market or third country "dumps" subject merchandise (i.e., sells subject merchandise for less than its cost of acquisition plus expenses) at an amount that is in addition to the amount the investigated producer is found to have "dumped" the merchandise (i.e., sold the subject merchandise for less than normal value).
Given these unique circumstances, we determine that it is appropriate to consider the full range of dumping (i.e., the amount resulting from the producer's sales and the amount resulting from the middleman's sales) when reaching a determination under section 735(a) of the Act. This is particularly important given the number of sales of subject merchandise produced by YUSCO which were sold to the U.S. customer through Ta Chen. Moreover, under these circumstances, it is inappropriate to determine an independent margin, allowable under section 351.107(b) in "unusual circumstances," for purposes of determining whether sales are made at LTFV under section 735(a)(1) or in determining eligibility for exclusion under section 735(a)(4) of the Act, because the full range of YUSCO's dumping in this particular matter, whether acting alone or in concert with a middleman, would not be entirely captured under such an analysis. Thus, we have determined one rate for YUSCO's merchandise, whether or not it is exported by Ta Chen.
Therefore, consistent with our determination in Notice of Final Determination of Sales at Less Than Fair Value:Stainless Steel Sheet and Strip in Coils From Taiwan, 64 FR 30592 (June 8, 1999) ("SSSS"), we calculated for this final redetermination pursuant to court remand, an overall weighted-average margin as provided for under section 735(c)(1)(B)(i) of the Act. We used this overall margin for determining whether subject merchandise is being sold in the United States at LTFV, as provided in section 735(a)(1) of the Act. We also compared the overall weighted-average margin to our de minimis benchmark to determine eligibility for exclusion, as provided in section 735(a)(4) of the Act.
INTERESTED PARTY COMMENTS
YUSCO argues that the Department's determination to apply a single weighted-average cash deposit rate for all of YUSCO's sales is inconsistent with its own practice. YUSCO contends that, although the Department cited its determination in SSSS as support for its position in the instant case, that case has been challenged under a separate proceeding, citing Tung Mung Development Co., Ltd. v. United States, Consol. Ct. No. 99-07-00457 ("Tung Mung"). YUSCO asserts that it is "incorporat[ing] by reference the arguments raised by YUSCO and Tung Mung in that appeal."
Petitioners agree with both the Department's draft determination and the legal reasoning supporting it.
We disagree with YUSCO that our determination is inconsistent with Department practice. Our determination is in line with SSSS and YUSCO has cited no other prior cases allegedly inconsistent with this determination.
With regard to YUSCO's attempt to incorporate by reference its and Tung Mung's arguments in Tung Mung, those arguments are not on the record in this proceeding. In this regard, we note that YUSCO neither repeated those arguments in its comments, nor attached a copy of its brief in Tung Mung to its comments in this case. All arguments that continue in the submitter's view to be relevant must be contained in its comments under 19 CFR 351.310(c)(2). Therefore, the Department is not responding to arguments that may have been made in another case, but which have not been made on the record of this proceeding.
YUSCO argues that the Department's determination fails to establish a deposit rate that is "reasonably correct," citing Torrington Co. v. United States, 44 F.3d 1572, 1578 (Fed. Cir. 1995) ("Torrington"). Specifically, YUSCO argues that the Department's determination to apply a single deposit rate to YUSCO inappropriately attributes to YUSCO responsibility for dumping margins caused by the middleman (Ta Chen) who is unaffiliated with YUSCO and over whom YUSCO has no control. YUSCO states that the Department's methodology unjustifiably treats the two companies as a collapsed entity and unfairly overstates the estimated dumping margin for YUSCO's sales made directly to the United States.
We disagree with YUSCO's interpretation of Torrington. The CAFC, in Torrington, stated that "Title 19 requires only cash deposit estimates, not absolute accuracy. These estimates need only be reasonably correct..." Torrington 44 F.3d at 1578. Thus, the court in Torrington allowed the Department a reasonable amount of flexibility in setting cash deposit rates. The Department has exercised this discretion in a reasonable manner in light of the legislative history of the Act, which clearly shows that Congress anticipated that the Department would calculate antidumping margins based on a middleman dumping analysis. See H.R. Rep. No. 96-317 at 75 (1979); S. Rep. No. 96-249, at 94 (1979). YUSCO has not addressed this specific legislative history, nor has it cited any portion of the statute, regulations, or case precedent that has been contradicted by our methodology. Moreover, because neither the statute, the regulations, nor the legislative history provides guidance as to how Commerce is to implement a middleman dumping analysis, Commerce has a certain amount of discretion in interpreting the statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837, 843 (1984). See also Torrington, 44 F.3d at 1577.
Additionally, while the statute and the regulations allow both a single rate and a combination rate, the regulations clearly indicate that the combination rate is the exception. In general, in an investigation, we are evaluating whether to exclude a respondent from a future order and whether merchandise is being sold at less-than-fair-value. In this case, we are also measuring the middleman's contribution to the total amount of dumping found when reaching a determination under section 735(a) of the Act. Given these unique circumstances, we determine that it is inappropriate to issue channel-specific combination rates because such rates will not capture the full range of dumping of YUSCO's merchandise.
REVISED WEIGHTED-AVERAGE DUMPING MARGIN
As a result of this redetermination, we have recalculated the dumping margins for YUSCO whether or not the merchandise is exported through Ta Chen. The revised margins are as follows:
YUSCO 10.20 % YUSCO/Ta Chen 10.20 %
Upon a final and conclusive court decision affirming this remand redetermination, we will publish notice of our amended results of review in the Federal Register and instruct the U.S. Customs Service to collect duties in accordance with the results.
Timothy J. Hauser
March 21, 2001