Government of Uzbekistan v. United States , 25 Ct. Int'l Trade 1084 ( 2001 )

SLIP OP. 01-114
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________
:
GOVERNMENT OF UZBEKISTAN and :
NAVOI MINING & METALLURGICAL :
COMBINAT, : Court No. 00-08-00392
:
Plaintiffs, :
:
v. :
:
THE UNITED STATES, :
:
Defendant. :
______________________________:
[ITA sunset review determination remanded.]
Dated: August 30, 2001
White & Case (Carolyn B. Lamm and Adams C. Lee) for
plaintiff.
Stuart E. Schiffer, Acting Assistant Attorney General,
David M. Cohen, Director, Velta A. Melnbrencis, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice, David R. Mason, Attorney, Office of
the Chief Counsel for Import Administration, United States
Department of Commerce, of counsel, for defendant.
OPINION
RESTANI, Judge: This matter is before the court on a motion
for judgment on the agency record pursuant to USCIT Rule 56.2.
Plaintiffs, the Government of Uzbekistan and Navoi Mining &
Metallurgical Combinat (collectively “Uzbeks”), challenge the
determination of the United States Department of Commerce
COURT NO. 00-08-00392 PAGE 2
(“Commerce” or “ITA”) pursuant to 19 U.S.C. § 1675(c) (1994)1
(“sunset review”) that dumping of uranium from Uzbekistan is
likely to occur if the antidumping duty discipline is removed.2
1
19 U.S.C. § 1675(c)(1) reads, in relevant part, as
follows:
Notwithstanding subsection (b) of this section and
except in the case of a transition order defined in
paragraph (6), 5 years after the date of publication
of–
(A) a countervailing duty order (other
than a countervailing duty order to which
subparagraph (B) applies or which was issued
without an affirmative determination of
injury by the Commission under section 1303
of this title), an antidumping duty order, or
a notice of suspension of an investigation,
described in subsection (a)(1),
* * *
the administering authority and the Commission shall
conduct a review to determine, in accordance with
[section 1675a] of this title, whether revocation of
the countervailing or antidumping duty order or
termination of the investigation suspended under
[section 1671c or 1673c] of this title would be likely
to lead to continuation or recurrence of dumping or a
countervailable subsidy (as the case may be) and of
material injury.
2
The court has sustained the determination of the
International Trade Commission (“ITC”) that imports of uranium
from Uzbekistan are not likely to injure the United States
industry if the antidumping duty discipline is removed. See Ad
Hoc Comm. of Domestic Uranium Producers v. United States, No. 00-
09-00450, slip op. 01-103 (Ct. Int’l Trade Aug. 14, 2001). A
decision by either ITC or Commerce to terminate the proceedings
pursuant to a sunset review will end the proceedings. 19 U.S.C.
§ 1675(d). At this time a change upon appeal of that decision is
still possible. If the decision to sustain the ITC determination
(continued...)
COURT NO. 00-08-00392 PAGE 3
FACTS
On December 5, 1991, Commerce initiated an antidumping duty
investigation to determine whether imports of uranium from the
Union of Soviet Socialist Republic (“USSR”) were being or were
likely to be sold in the United States at less-than-fair value
(“LTFV”). Uranium from the Union of Soviet Socialist Republics,
56 Fed. Reg. 63711 (Dept’ Comm. 1991). On December 23, 1991, the
U.S. International Trade Commission (“ITC” or “Commission”)
issued an affirmative preliminary injury determination.
On December 28, 1991, the USSR dissolved and the United
States subsequently recognized the 12 newly independent States
which emerged. Commerce, nevertheless, determined to continue
the investigation. That determination was sustained. See
Techsnabexport, Ltd. v. United States, 16 CIT 420, 795 F. Supp.
428 (1992) (“Techsnabexport I”), and Techsnabexport, Ltd. v.
United States, 16 CIT 855, 802 F. Supp. 469 (1992)
(“Techsnabexport II”).
Commerce determined that sales of uranium from six of the 12
former republics, including Uzbekistan, were made at LTFV during
the period of investigation, which covered June 1, 1991 through
November 30, 1991. Uranium From Kazakhstan, Kyrgystan, Russia,
Tajikistan, Ukraine and Uzbekistan; Uranium from Armenia,
2
(...continued)
becomes conclusively final, this dispute will be moot.
COURT NO. 00-08-00392 PAGE 4
Azerbaijan, Byelarus, Georgia, Moldova and Turkmenistan, 57 Fed.
Reg. 23,380, 23,380, 23,382 (Dep’t Comm. 1992) (“Preliminary
Determination”). Because it found that the respondents failed to
provide adequate information in a timely manner, Commerce based
its preliminary LTFV calculations upon the best information
otherwise available (“BIA”), which was largely petition data and
which resulted in a cash deposit rate equal to 115.82 percent for
all relevant entries of uranium. Id. at 23,382, 23,384.
The investigation of uranium from the countries found to be
selling at LTFV was suspended in October of 1992 because those
countries entered into agreements to restrict the volume of
direct or indirect exports to the United States.3 There is no
allegation that any interested party sought the continuance of
the investigation after notice of suspension as provided in 19
U.S.C. § 1673c(g), or sought an administrative review of the
suspension or of the dumping margin as provided in 19 U.S.C.
§ 1675(a), or a changed circumstances review as provided in 19
U.S.C. § 1675(b).
On August 2, 1999, Commerce initiated a sunset review of the
suspension agreement on uranium from Uzbekistan. Initiation of
Five-Year (“Sunset”) Reviews, 64 Fed. Reg. 41,915, 41,915 (Dep’t
3
See Uranium from Kazakhstan, Kyrgyzstan, Russia,
Tajikistan, Ukraine, and Uzbekistan, 57 Fed Reg. 49,220, 49,255-
61 (Dep’t Comm. 1992) [hereinafter “Uzbek Suspension Agreement”].
Subsequent amendments to the agreements are not relevant here.
COURT NO. 00-08-00392 PAGE 5
Comm. 1999). In their response to the initiation of the review,
plaintiffs contended, among other things, that procedural defects
in the original investigations prevented their full participation
and denied that subject imports from Uzbekistan were ever dumped
in the United States; that the sunset determination must be based
upon country-specific information for Uzbekistan; and that
Commerce must terminate the suspended investigation because there
was no substantial evidence to support a positive likelihood
determination with respect to Uzbekistan. In plaintiffs’ view,
there also has been no dumping since entry into the suspension
agreement because sales have been made pursuant to long-term
contracts in which the prices of sales to the United States are
set above comparable U.S. market prices; and Uzbekistan has no
economic incentive to sell at below U.S. market prices.
Plaintiffs also contended that Commerce should find good cause
under 19 U.S.C. § 1675a(c) to consider factors other than the
existing margin and the volume of merchandise before and after
the suspension agreement, and that the Department should allow
them to submit country-specific data.4
4
19 U.S.C. § 1675a(c) reads in relevant part as follows:
(1) In general
In a review conducted under [section 1675(c)] of this
title, the administering authority shall determine
whether revocation of an antidumping duty order or
(continued...)
COURT NO. 00-08-00392 PAGE 6
On February 18, 2000, Commerce issued Uranium from
Uzbekistan, 65 Fed. Reg. 10,471 (Dep’t Comm. 2000) (prelim.
sunset determ.) [hereinafter “Preliminary Results”]. The
Preliminary Results adopted and incorporated an Issues and
Decision Memorandum for the Sunset Review of Uranium from
4
(...continued)
termination of a suspended investigation under [section
1673c] of this title would be likely to lead to
continuation or recurrence of sales of the subject
merchandise at less than fair value. The administering
authority shall consider–
(A) the weighted average dumping margins determined in
the investigation and subsequent reviews, and
(B) the volume of imports of the subject merchandise
for the period before and the period after the issuance
of the antidumping duty order or acceptance of the
suspension agreement.
(2) Consideration of other factors
If good cause is shown, the administering authority
shall consider such other price, cost, market, or
economic factors as it deems relevant.
(3) Magnitude of the margin of dumping
The administering authority shall provide to the
Commission the magnitude of the margin of dumping that
is likely to prevail if the order is revoked or the
suspended investigation is terminated. The
administering authority shall normally choose a margin
that was determined under [section 1673d] of this title
or under [ section 1675(a) or (b)(1)] of this title.
19 U.S.C. §§ 1673d, 1675(a), and 1675(b)(1) are, respectively,
final determinations, periodic review determinations and changed
circumstances review determinations.
COURT NO. 00-08-00392 PAGE 7
Uzbekistan (Feb. 28, 2000), P.R. Doc. 1248, Pl.’s App., Tab 4.
In response, plaintiffs submitted a case and rebuttal brief that
again complained about the procedural irregularities in the
original investigation and asserted that Commerce erred in the
Preliminary Results. Uzbeks Case Brief (Apr. 10, 2000), C.R.
Doc. 1270, Pl.’s App., Tab 10; Uzbeks Rebuttal Brief (Apr. 18,
2000), P.R. Doc. 1281, Pl.’s App., Tab 11.
On July 5, 2000, Commerce rejected plaintiffs’ arguments in
Uranium from Uzbekistan, 65 Fed. Reg. 41,441 (Dep’t Comm. 2000)
(final sunset determ.) [hereinafter “Final Results”]. The Final
Results adopted and incorporated an Issues and Decision
Memorandum for the Sunset Review of Uranium from Uzbekistan (June
27, 2000), P.R. Doc. 1288, Pl.’s App., Tab 2.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c).
In reviewing final determinations in antidumping duty
investigations and reviews, the court will hold unlawful those
agency determinations that are “unsupported by substantial
evidence on the record, or otherwise not in accordance with law.”
19 U.S.C. § 1516a(b)(1)(B)(i).
COURT NO. 00-08-00392 PAGE 8
DISCUSSION
This case is sui generis. It involves the issue of what
procedures are to be followed when an antidumping case is filed
against one country and that country dissolves into numerous
others before the proceedings are concluded.
In earlier litigation, the court permitted the investigation
of uranium imports from the former Soviet republic to continue
even though the proceedings were commenced against the Soviet
Union and certain deficiencies in responses were attributable to
the break up of the Soviet Union. It was the court’s
understanding that the individual exporting countries or concerns
would be permitted to submit their own data before adverse
consequences ensued or would receive appropriate consideration or
adjustment due to lack of control from the outset of the
proceedings. Techsnabexport II, 802 F. Supp. at 473. Commerce
has done little to adapt its procedures to fit these unique
circumstances and does not attempt to defend its actions on the
basis that the preliminary margin is actually reflective of
dumping at any time by the Uzbeks. Rather, defendant attempts to
support its decision by claiming that the Uzbeks are technically
barred from raising their arguments.
Commerce argues that 19 U.S.C. § 1675(c)(3) permits it to
assume that there was dumping even though the proceedings were
suspended, and to adopt the preliminary BIA margin for purposes
COURT NO. 00-08-00392 PAGE 9
of its analysis and in order to provide a margin to the ITC.
Commerce seeks to support its conclusion by noting that the
agency could not rely on the margins specified in § 1675a(c)(3),
because there is neither a final determination margin to use nor
any margin available from a review of such a determination.
It may be that in a more normal case with no § 1675a(c)(3)
margins available, Commerce has the discretion to assume dumping
and to use any preliminary margin that is more than de minimis.
See Policies Regarding the Conduct of Five-year (“Sunset”)
Reviews of Antidumping and Countervailing Duty Orders, 63 Fed.
Reg. 18,871, 18,873 (Dep’t Comm. 1998) (Sunset Policy Bulletin).
The court need not decide whether Commerce may use a preliminary
margin without applying some safeguards or doing further
investigation for purposes of an ordinary sunset review. This is
not a normal case. Commerce’s use in this case of the
preliminary margin is not based on substantial evidence or in
accordance with law. Commerce here abused its discretion when it
used such discretion to deny parties fair opportunity to
participate in a meaningful way.5
5
Commerce does not address the Uzbeks’ allegation that
they did not receive notice of the original proceedings until
after the preliminary margin was determined. It is undisputed
that the Uzbeks attempted to submit their own data here and were
rebuffed. Commerce simply refused to consider the possibility
that a re-calculation of the dumping margin would be particularly
appropriate in this case, notwithstanding the fact that the
(continued...)
COURT NO. 00-08-00392 PAGE 10
It is spurious to argue that the Uzbeks had the chance to
obtain an effective review under 19 U.S.C. §§ 1675(a) or (b) of
the highly adverse margin and to dispute any procedural
deficiencies in such reviews. In this case there was no
antidumping duty order to review under §§ 1675(a) and (b) because
the suspension agreement interrupted the proceedings, as it was
designed to do. A section 1675 review of the suspension
agreement in order to obtain a new margin calculation itself
would be meaningless. Rules governing compliance with and
modification of the suspension agreement are provided for within
the agreement itself. See Uzbek Suspension Agreement, Arts.
VIII, X, XI, and there is little purpose to focusing on the past
margin arrived at in the extraordinary circumstances present in
this case.6
Under these circumstances there is more than enough reason
for Commerce to consider factors outside the norm, as it
5
(...continued)
Statement of Administrative Action (“SAA”) contemplates that in a
sunset review new margins may be calculated if extraordinary
circumstances exist. SAA, accompanying H.R. Rep. No. 103-826(I),
at 890-91, reprinted in 1994 U.S.C.C.A.N. 4040, 4214.
6
Although they arise differently, changed circumstances
reviews and sunset reviews share the purpose of determining
whether continued unfair trade relief is necessary. See Eveready
Battery Co., Inc. v. United States, Slip Op. 99-126 at 20 (CIT
1999). In Eveready, the ITC took the position that an ongoing
sunset review moots a request for a changed circumstance review,
which the court found to be true under the facts of that case.
COURT NO. 00-08-00392 PAGE 11
acknowledged it may do under 19 U.S.C. § 1675a(c)(2), and there
is insubstantial reason for proceeding in lockstep with “normal”
procedures. The Uzbeks have not had a fair opportunity to have
any information considered as to whether their exports were
dumped and at what level such dumping occurred, if it did occur.
Section 1675(c) assumes that dumping occurred. That assumption
has not been shown to be an acceptable one in this case,
particularly at the level selected.7
Further, Commerce does not address the Uzbeks’ argument that
its conduct violates the WTO Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade (1994)
(“Antidumping Agreement”).8 Rather, it relies on another
erroneous technical bar argument. It relies on the prohibition
of 19 U.S.C. § 3512(c)(1) against challenges to governmental
action on the basis that it violates a WTO agreement. Of course,
the Uzbeks are not bringing an action under any WTO agreement,
and they are free to argue that Congress would never have
intended to violate an agreement it generally intended to
implement, without expressly saying so.
7
Indeed, the preliminary margin is based on petition data
as to the USSR and not as to Uzbekistan.
8
The Uzbeks assert that Articles 6.0 and 11.4 of the
Antidumping Agreement together require in a sunset review that
dumping margins be calculated for individual exporters or
producers.
COURT NO. 00-08-00392 PAGE 12
The court need not resolve whether Commerce’s action
violates the Antidumping Agreement and whether Congress intended
to permit such violation. Nor will the court address whether the
overall decision that dumping would continue if the antidumping
duty regime were not applicable is supported by substantial
evidence. As a threshold matter Commerce must support its
finding of a non-de minimis margin before it can embark on a
rational § 1675(c) analysis. Under the unique facts of this
case, it cannot simply accept the preliminary BIA margin based on
the “normal” rules. It must use the discretion given to it by
the statute to address an extraordinary situation so as to make
some rational decisions in a fair manner.
COURT NO. 00-08-00392 PAGE 13
This matter is remanded for conduct in accordance with this
opinion. As Commerce lacks information to provide a reasonably
accurate likely margin for Uzbekistan, it shall gather new data.
Because of the matter discussed in note 2, the parties shall
consult and, within 11 days hereof, propose an order governing
timing of the remand proceedings.
__________________________
Jane A. Restani
Judge
Dated: New York, New York
This 30th day of August, 2001.
ERRATUM
Government of Uzbekistan and Navoi Mining & Metallurgical Combinat v. United States, Court
No. 00-08-00392, Slip Op. 01-114, dated August 30, 2001.
In the first sentence of the second paragraph on page 8, replace the word “republic” with
the word “republics.”