Mannesmann-Sumerbank Boru Endustrisi T.A.S. v. United States , 24 Ct. Int'l Trade 306 ( 2000 )

Slip Op. 00-50
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: RICHARD W. GOLDBERG, JUDGE
MANNESMANN-SUMERBANK BORU
ENDUSTRISI T.A.S., BORUSAN
BIRLESIK BORU FABRIKALARI
A.S., AND BORUSAN ITHALAT
IHRACAT VE DAGITIM A.S.,
Plaintiffs,
v.
Court No. 98-05-02185
UNITED STATES OF AMERICA,
Defendant,
and
ALLIED TUBE & CONDUIT CORP.
AND WHEATLAND TUBE COMPANY,
Defendant-
Intervenors.
[Court remands.]
Dated: May 3, 2000
Dickstein Shapiro Morin & Oshinsky LLP, (Arthur J. Lafave
III and Douglas N. Jacobson) for plaintiffs.
David W. Ogden, Acting Assistant Attorney General; David
M. Cohen, Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice; Lucius B. Lau,
Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Office of the Chief Counsel for
Import Administration, United States Department of Commerce
(Linda A. Andros), of counsel, for defendant.
Court No. 98-05-02185 Page 2
OPINION and ORDER
GOLDBERG, Judge: In its opinion, Mannesmann-Sumerbank Boru
Endustrisi T.A.S. v. United States, 23 CIT __, 86 F. Supp. 2d
1266 (1999), the Court reviewed the Department of Commerce’s
(“Commerce”) Certain Welded Carbon Steel Pipe and Tube and Welded
Carbon Steel Line Pipe from Turkey; Final Results and Partial
Recission of Countervailing Duty Administrative Reviews, 63 Fed. Reg.
18,885 (April 16, 1998) ("Final Results"). The Court remanded a
portion of the Final Results to Commerce with instructions to
“include plaintiffs’ foreign exchange gains in the denominator of the
subsidy margin or provide an adequate explanation of how this case
differs from prior determinations.” Mannesmann-Sumerbank, 23 CIT
at __, 86 F. Supp. 2d at 1277. The Court further instructed Commerce
that “[i]f [it] takes the latter course of action, it must also
explain why Turkish GAAP and plaintiffs’ accounting methods are
unreliable or distortive.” Id.In order to “weigh the policy implications of this issue
against its overall countervailing duty practice,” Commerce
requested, and was granted, an extension of time in which to file
Court No. 98-05-02185 Page 3
its remand determination. Motion for Extension of Time of 2/16/00.
On March 17, 2000, Commerce submitted its Final Results of
Redetermination on Remand (“Remand Results”) to the Court.
In the Remand Results, Commerce chose not to recalculate the
subsidy margin. Instead, it asserts that its long-standing policy
has been to exclude foreign exchange gains from the denominator.
Further, Commerce asserts that this policy is reasonable. Because
Commerce fails to adequately substantiate its practice or its
reasonableness, however, the Court once again remands the Final
Results.
In the Remand Results, Commerce states that its long-standing
policy has been to exclude foreign exchange gains and losses from the
denominator of the subsidy equation. See Remand Results, at 3. Yet,
it does not point to a single previously published source to
illustrate its avowed practice. In fact, Commerce asserts
that “this aspect of our calculations is not directly
addressed in the public notices describing our investigative
or review results.” Remand Results, at 3.
Nonetheless, Commerce counsels the Court to ignore both
Final Affirmative Countervailing Duty Determination: Certain Pasta
(“Pasta”) from Turkey (“Pasta From Turkey”), 61 Fed. Reg.
Court No. 98-05-02185 Page 4
30,366, (June 14, 1996) and Final Affirmative Countervailing Duty
Determination; Brass Sheet and Strip From Brazil (“Brass Sheet”), 51
Fed. Reg. 40,837 (Nov. 10, 1986) because they are “not reflective of
general Department practice.” Remand Results, at 3. In discussing
Brass Sheet, Commerce rationalizes that the determination is 14
years old, and thus “it is difficult to determine why exchange rate
gains were included in the sales denominator.” Id. at 6. And with
respect to Pasta from Turkey, Commerce acknowledges that “the
Department departed from its practice without a substantive
explanation.” Remand Results, at 8. While these two determinations
do not definitively establish Commerce’s prior practice, they are the
only published sources available to the Court to assess that
practice. And, notably, they both contradict Commerce’s avowed
policy.
Moreover, when discussing the reasonableness of its
avowed policy, Commerce claims that “companies do not
routinely adjust the booked value of their sales for exchange
rates and losses,” and that companies that do otherwise are
“exceptions.” Remand Results, at 4. Yet Commerce provides no
support for this assertion. Nor does Commerce supply the
basis for its rationale that “the U.S. Customs Service uses
the F.O.B. value of imports
Court No. 98-05-02185 Page 5
to establish the CVD duties an importer must pay at the time
the goods enter the country.” Remand Results, at 5.
Finally, although this case involves the 1996
administrative review, Commerce notes in the Remand Results
that it indexed the numerator and denominator of the subsidy
calculation in the 1997 administrative review. See Remand
Results, at 7 n.3. In the Preliminary Results of that review,
Commerce explains that “[i]ndexing the benefit and the sales
figure will neutralize any potential distortion in our subsidy
calculations caused by high inflation and the timing of the
receipt of the subsidy.” Certain Welded Carbon Steel Pipes
and Tubes and Welded Carbon Steel Line Pipe from Turkey;
Preliminary Results of Countervailing Duty Administrative
Reviews, 64 Fed. Reg. 16,924, 16,926 (Apr. 7, 1999).
In light of Commerce’s position in the Remand Results
that its policy of excluding foreign exchange gains and losses
from the denominator of the subsidy equation is reasonable,
Commerce’s reference to its 1997 determination raises a
question for this review. That is, given the “potential [for]
distortion” described above, whether Commerce’s decision to
exclude foreign exchange gains and losses in this case is
still reasonable
Court No. 98-05-02185 Page 6
considering (1) there was high inflation and (2) Commerce did
not index the numerator and denominator of the subsidy
calculation (as it did in the later review).
Because Commerce has failed to substantiate its practice
or its reasonableness, this Court remands. It is hereby
ORDERED that Commerce’s determination, in the Final
Results, to exclude plaintiffs’ “kur farki” accounts from the
denominator of the subsidy equation is remanded in conformance
with the original remand instructions;
ORDERED that Commerce shall, within thirty (30) days of
the date of this Order, issue a remand determination;
ORDERED that the parties may, within ten (10) days of the
date on which Commerce issues its remand determination, submit
memoranda addressing Commerce’s remand determination, not to
exceed five (5) pages in length; and it is further
ORDERED that the parties may, within ten (10) days of the
date on which memoranda addressing Commerce’s remand
determinations are filed, submit response briefs, not to
exceed five (5) pages in length.
______________________
Richard W. Goldberg
JUDGE
Dated: May 3, 2000
New York, New York.