Corus Staal BV v. United States

Slip Op. 05-85

UNITED STATES COURT OF INTERNATIONAL TRADE

CORUS STAAL BV,

Plaintiff,

v. Before: Jane A. Restani, Chief Judge

UNITED STATES, Court No. 04-00316

Defendant,

and

UNITED STATES STEEL CORPORATION,

Defendant-Intervenor.

OPINION

[Results of final administrative review of antidumping duty order on hot-rolled steel from the
Netherlands sustained.]

Dated: July 19, 2005

Steptoe & Johnson LLP (Richard O. Cunningham, Joel D. Kaufman, Alice A. Kipel, and
Troy H. Cribb) for plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Jeanne E.
Davidson, Deputy Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Claudia Burke), Amanda Blaurock, Office of Chief Counsel for Import
Administration, United States Department of Commerce, of counsel, for defendant.

Skadden, Arps, Slate, Meagher & Flom LLP (John J. Mangan) for defendant-intervenor.

Restani, Chief Judge: This matter is before the court on the plaintiff Corus Staal BV’s

(“Corus”) motion for judgment on the agency record pursuant to United States Court of International
Court No. 04-00316 Page 2

Trade Rule 56.2. At issue are the final results of the first administrative review of an antidumping

duty order by the International Trade Administration of the United States Department of Commerce

(“Commerce” or “Department”) of hot-rolled steel from the Netherlands. See Certain Hot-Rolled

Carbon Steel Flat Products from the Netherlands, 69 Fed. Reg. 33,630 (Dep’t Commerce June 16,

2004) (final admin. rev.), as amended by, 69 Fed. Reg. 43,801 (Dep’t Commerce July 22, 2004) (am.

final admin. rev.) [hereinafter Final Results].

Corus claims (1) that the agency’s use of a “zeroing” methodology is contrary to law, and

(2) that its use of the date of entry (instead of the date of sale) for selection of certain export price

(“EP”) transactions is both contrary to law and unsupported by substantial evidence. Corus claims

that zeroing, whereby “negative dumping margins,” viz, where the U.S. price is higher than the

normal value (“NV”), are set to zero in calculating Corus’s weighted average dumping margin (and

concomitant assessment rate) do not properly allow non-dumped sales to offset dumped sales,

introducing an “improper statistical bias into the calculation.” Pl.’s Br. at 2. Corus further claims

that this court and the Court of Appeals for the Federal Circuit have held that zeroing is not required

by statute, and, therefore, this court may only uphold Commerce’s methodology if it is reasonable,

which Corus asserts it no longer is, given the WTO Antidumping Agreement, see Pub. L. No. 103-

465, 108 Stat. 4809 (1994), and recent WTO decisions.1

1
See, e.g., United States – Final Dumping Determination on Softwood Lumber
from Canada, WT/DS264/AB/R, 2004 WTO DS LEXIS 18 (Aug. 11, 2004, adopted Aug.
31, 2004) (appellate body report) (“Softwood Lumber”); United States – Sunset Review
of Anti-Dumping Duties on Corrosion-resistant Carbon Steel Flat Products from Japan,
WT/DS244/AB/R, 2003 WTO DS LEXIS 218 (Dec. 15, 2003, adopted Jan. 9, 2004)
(appellate body report) (“Corrosion-resistant Steel”); European Communities – Anti-
Dumping Duties on Imports of Cotton-Type Bed Linen from India, WT/DS141/AB/R,
2001 WTO DS LEXIS 13 (Mar. 1, 2001, adopted Mar. 12, 2001) (appellate body report)
(continued...)
Court No. 04-00316 Page 3

In addition, Corus argues that Commerce erred legally and factually by using the date of

entry to select certain EP transactions for review, which it asserts is inconsistent with its use of the

date of sale for other EP transactions and all constructed export price (“CEP”) sales. Because,

allegedly, Commerce offered no reasonable explanation for basing its review in some instances on

the date of sale and in others on the date of entry, and offered no explanation for deviating from its

prior and exclusive use of the date of sale as a selection criterion in its preliminary results,2 Corus

asks the court to enter an order remanding this administrative review to Commerce. Corus also asks

this court to instruct Commerce, on remand, (1) to re-calculate Corus’s dumping margin, cash

deposit rate, and assessment rate without resort to zeroing; (2) to use, exclusively, the date of sale

to select the transactions to be reviewed during the period of review (“POR”) (instead of date of sale

for CEP transactions and a combination of date of sale and date of entry for EP transactions); and

(3) to refund the amount of estimated antidumping duty deposits collected in excess of the lawful

amount.

In response to plaintiff’s motion, both the defendant (“Government” or “Commerce”), and

the United States Steel Corporation (“U.S. Steel”), the defendant-intervenor, argue that Corus’s

motion, with respect to zeroing, should be denied because the final results are in accordance with

law. Commerce, citing decisions by this court and the Federal Circuit, which have both repeatedly

sustained Commerce’s methodology, asserts: (1) zeroing is a “reasonable” interpretation of an

ambiguous statutory provision regarding dumping margins and weighted average dumping margins,

(...continued)
(“EC-Bed Linen”).
2
See Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands, 68 Fed. Reg.
68,341 (Dep’t Commerce Dec. 8, 2003) (prelim. admin. rev.) [hereinafter Prelim. Results].
Court No. 04-00316 Page 4

see 19 U.S.C. § 1677(35) (2000); and (2) the WTO reports cited by Corus are legally irrelevant, for

numerous reasons. U.S. Steel agrees with Commerce that the Department’s use of zeroing was

proper, and that Corus’s reliance on WTO decisions is misplaced, but also asserts that zeroing is not

merely in accordance with law but that its use is actually required by law.

As for the second issue, regarding Commerce’s classification of certain U.S. sales as EP

sales, Commerce and U.S. Steel disagree. Commerce asks the court to remand the issue to

Commerce to re-classify certain EP transactions; U.S. Steel requests that the plaintiff’s motion, in

all respects, be denied. U.S. Steel asserts that Corus mischaracterized certain sales (those made to

its just-in-time (“JIT”) customers) as EP sales, and argues that any sales made after importation

must, according to the statutory terms, see 19 U.S.C. § 1677a(a)–(b) (2000), be CEP sales. U.S.

Steel further argues that the Department properly utilized its standard methodology of using the date

of sale during the POR for CEP sales (and for EP-classified sales made after importation, such as

CEP sales normally are), and of using the date of entry for ordinary EP sales. As explained below,

the court concludes that remand is not appropriate and the final results of the administrative review

are sustained.

PROCEDURAL HISTORY

This appeal arises out of the first administrative review of an antidumping duty order

regarding hot-rolled steel from the Netherlands. U.S. Steel, a domestic producer of hot-rolled steel,

and a defendant-intervenor in these proceedings, was both a petitioner in the investigation that

resulted in Commerce’s antidumping duty order and an active participant in the administrative

proceedings below. Corus, the plaintiff, is a producer of hot-rolled steel in the Netherlands and

brought this appeal to challenge two aspects of the final results that pertain to the calculation
Court No. 04-00316 Page 5

methodology Commerce used to determine the 4.80% weighted average dumping margin applicable

to Corus: (1) zeroing; and (2) the change in selection criterion from date of sale, to date of sale for

all CEP transactions and certain EP transactions and date of entry for the remaining post-importation

EP sales. See Final Results, 69 Fed. Reg. at 33,631 and accompanying Issues & Decision Mem.

[hereinafter “Issues Mem. to Steel from the Netherlands”], at cmts. 4, 10, as amended by, 69 Fed.

Reg. at 43,802.

On November 29, 2001, Commerce published the antidumping duty order on certain hot-

rolled carbon steel flat products from the Netherlands. See Certain Hot-Rolled Carbon Steel Flat

Products from the Netherlands, 66 Fed. Reg. 59,565 (Dep’t Commerce Nov. 29, 2001) (antidumping

duty order). On November 1, 2002, Commerce published notice of the opportunity to request an

administrative review of certain hot-rolled carbon steel flat products from the Netherlands, covering

the period from May 3, 2001, to October 31, 2002. See Antidumping or Countervailing Duty Order,

Finding, or Suspended Investigation, 67 Fed. Reg. 66,612 (Dep’t Commerce Nov. 1, 2002)

(opportunity to req. admin. rev.).

On November 26 and 27, 2002,3 a group of U.S. steel companies, including U.S. Steel,

pursuant to 19 C.F.R. 351.213(b)(1) (2004),4 requested that Commerce, in accordance with 19

U.S.C. § 1675 (2000),5 conduct an administrative review of Corus’s sales of the subject

3
Nucor Corporation filed its request for administrative review on November 26,
2002; Bethlehem Steel Corporation, National Steel Corporation, and U.S. Steel filed their
request on November 27, 2002. Prelim. Results, 68 Fed. Reg. at 68,342 n.1.
4
Allowing domestic interested parties to request an administrative review of an
antidumping or countervailing duty order each year during the anniversary month of the
order’s publication.
5
Providing for periodic review of duty order amount, at least once during each 12-month
(continued...)
Court No. 04-00316 Page 6

merchandise. On December 26, 2002, Commerce published a notice of initiation of this

antidumping duty administrative review, covering the period from May 3, 2001, through October

31, 2002. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 67 Fed.

Reg. 78,772 (Dep’t Commerce Dec. 26, 2002). On January 9, 2003, Commerce issued its

antidumping duty questionnaire to Corus—an ongoing question and response process that lasted

from then until May 19, 2003, when Corus responded to Commerce’s third supplemental

questionnaire. See Prelim. Results, 68 Fed. Reg. at 68,342. Commerce then verified Corus’s

submitted data and requested Corus to report entered value data. See id. Also, as a result of the

court’s decision in Corus Staal BV v. United States, 283 F. Supp. 2d 1357, 1358 (Ct. Int’l Trade

2003), the Department will not assess duties on subject merchandise that entered between October,

30, 2001, and November 28, 2001, inclusive. See also Certain Hot-Rolled Carbon Steel Flat

Products from the Netherlands, 68 Fed. Reg. 60,912, 60,912 (Dep’t Commerce Oct. 24, 2003) (final

ct. decision & suspension of liquidation).

On December 8, 2003, Commerce published its preliminary results from the administrative

review of the antidumping duty order on hot-rolled steel from the Netherlands. See Prelim. Results,

68 Fed. Reg. at 68,341. After issuance of these preliminary results, the Department invited

comments; and in response, Corus, U.S. Steel, and Nucor filed case briefs on January 14, 2004, and

submitted rebuttal briefs on January 23, 2004. See Final Results, 69 Fed. Reg. at 33,630. After

5
(...continued)
period, beginning on the anniversary of the date of publication of the antidumping duty order, if
a request for such a review has been received.
Court No. 04-00316 Page 7

Corus timely-filed a ministerial error allegation, in accordance with 19 C.F.R. 351.224(c)(2) (2004),6

the Department revised its antidumping duty margin for Corus, decreasing it from the original 4.94%

assessment to the currently contested 4.80% ad valorem. See Certain Hot-Rolled Carbon Steel Flat

Products from the Netherlands, 69 Fed. Reg. 43,801, 43,801–02 (Dep’t Commerce July 22, 2004)

(am. final admin. rev.). Corus timely commenced this action under 19 U.S.C. § 1516a(a)(2)(A)(i),7

(B)(iii)8 (2000), and 28 U.S.C. § 1581(c) (2000).

JURISDICTION & STANDARD OF REVIEW

The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c). The

court, in reviewing one of Commerce’s administrative determinations, will uphold the challenged

determination unless it is “unsupported by substantial evidence on the record, or otherwise not in

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce’s Request For Remand Is Denied

Prior to oral argument, the court denied Commerce’s request for a remand. The request was

both unsupported and unexplained. With respect to the classification of sales as EP or CEP,

Commerce simply stated that “[u]pon further review . . . certain transactions were mistakenly

classified as EP transactions.” Resp. Br. at 26.

6
Setting five days as the time limit for submitting comments regarding ministerial
errors.
7
Allowing review of administrative determinations on the record within thirty days of
the date of publication in the Federal Register.
8
Defining reviewable determinations to include final determinations by the
“administering authority” (Commerce) or the “Commission” (International Trade Commission)
under 19 U.S.C. § 1675.
Court No. 04-00316 Page 8

In SKF USA, Inc. v. United States, 254 F.3d 1022, 1028 (Fed. Cir. 2001), the Court of

Appeals addressed the issue of a voluntary remand when Commerce’s original determination,

denying a favorable adjustment to the plaintiff-appellant, was not required by statute. After initially

determining, during the administrative review, that the loss incurred on the sale of a subsidiary

should be included in the plaintiff’s general and administrative (“G&A”) expense calculation,

Commerce, on appeal before the Court of International Trade, “reversed course,” and instead of

defending its final results, sought a remand, arguing, in accordance with the plaintiff’s position, that

the loss should no longer be included in the G&A expense calculation. Id. at 1026.

Obviously, this case differs from SKF because Commerce’s remand request is not so that it

may bestow a benefit on the party paying duties. Here, the request is in response to defendant-

intervenor U.S. Steel’s brief, which claims a misclassification—“because these so-called EP sales

did not meet the statutory definition of EP,” (see Def.-Intervenor’s Br. at 25–26)—although U.S.

Steel admits it missed the time for filing suit to change the classification. Nonetheless, SKF may

be instructive because the court explained that an agency may seek a remand (1) to reconsider its

decision because of intervening events outside of the agency’s control; (2) to reconsider its previous

position even if there are no intervening events; or (3) because it believes that its original decision

was incorrect on the merits and it wishes to change the result. 254 F.3d at 1028–29.

The first situation does not apply to this case.

With respect to the second situation, the Federal Circuit explained that an agency may

“simply state that it had doubts about the correctness of its decision or that decision’s relationship

to the agency’s other policies.” Id. at 1029. In that situation, the reviewing court has discretion over

whether to remand, and may refuse a remand if the agency’s request is “frivolous or in bad faith.”
Court No. 04-00316 Page 9

Id. But, “if the agency’s concern is substantial and legitimate, a remand is usually appropriate.” Id.

Here, there does not appear to be any substantial or legitimate administrative concern warranting

a remand. Commerce’s stated reason for requesting a remand was simply “to correct this

classification so that its written position is consistent with the factual record.” Def.’s Resp. Br. at

26. Commerce articulated no other policy issue or view, nor did it otherwise express any doubts

about the correctness of its decision in relation to the agency’s other policies.

With respect to the third situation, the court held that a “[r]emand to an agency is generally

appropriate to correct simple errors, such as clerical errors, transcription errors, or erroneous

calculations.” SKF, 254 F.3d at 1029. The court explained that “[a]lthough a court need not

necessarily grant such a remand request, remand may conserve judicial resources, or the agency’s

views on the statutory question, though not dispositive, may be useful to the reviewing court.” Id.

Here, a remand would not seem to preserve judicial resources or permit application of

Commerce’s views on a statutory question. See Corus Staal BV v. United States, 259 F. Supp. 2d

1253, 1257 (Ct. Int’l Trade 2003) (“Corus Staal I”) (“[C]oncerns for finality do exist and the agency

must state its reasons for requesting remand. Further, if only to guard against the ‘bad faith’ requests

of concern to the court in SKF, the court must be apprised of the reason for the remand request,

whether it be on account of error or merely a change in policy.”).

While there was a vague reason given here, which exceeds the information provided in the

earlier Corus Staal I case, this was still insufficiently informative. There is no real evidence that

Commerce erred. While the EP sales at issue appear were invoiced after importation, a hallmark

of CEP sales, the statute does permit, inter alia, “post-importation” EP sales where the sale is pre-

negotiated. See 19 U.S.C. § 1677a(a) (“The term ‘export price’ means the price at which the subject
Court No. 04-00316 Page 10

merchandise is first sold (or agreed to be sold) before the date of importation . . . .”). Thus, if an

error did occur, Commerce needed to explain it in detail.

Furthermore, U.S. Steel avers that reclassifying the sales from EP to CEP would have an

insignificant effect on the dumping margin, and it does not seek this relief. Accordingly, if the court

has discretion over whether to grant this remand request, the court exercises such discretion to deny

this request for remand, which likely would simply delay this matter for no substantial reason.

The court is concerned that Commerce is taking some broad language in the SKF decision,

the holding of which may apply to a very narrow group of cases, out of context, simply to avoid

dealing with difficult methodological issues. In this case, Commerce did not even brief the issue

of the proper date for selection of EP and CEP sales, relying instead on its unsupported request for

remand to delay the day of reckoning. This was a disservice to the court, as the court must resolve

this issue. The interests of both plaintiffs and defendants depend on the prompt and orderly

resolution of these matters, which Congress clearly intended.9 The Government must give due

regard to finality and cannot simply ask for a do-over any time it wishes.

9
Reflecting the need for expedition in these matters, United States Court of International
Trade Rule 3(g) provides for the precedence of unfair trade cases over most other actions, and
the statute contains a series of time limitations on Commerce’s actions. See USCIT Rule 3(g)
(listing an action contesting a determination in a countervailing or antidumping duty proceeding
third in order of precedence, following only an action seeking injunctive relief and an action
involving the exclusion or redelivery of perishable merchandise); 19 U.S.C. § 1675(a)(3)(A)
(requiring, if practicable, “[t]he administrating authority [to] make a preliminary determination
[in a review as to the amount of any antidumping duty] within 245 days after the last day of the
month in which occurs the anniversary of the date of publication of the order, finding, or
suspension agreement for which the review . . . is requested, and a final determination . . . within
120 days after the date on which the preliminary determination is published.”).
Court No. 04-00316 Page 11

II. Commerce’s Use Of Zeroing Is Reasonable And In Accordance With Law

As Corus noted in its brief, numerous cases before this court and the Federal Circuit have

held that “zeroing” is neither required nor prohibited by the U.S. statute, see 19 U.S.C. §

1677(35)(A),10 (B),11 in either an investigation, see, e.g., Corus Staal I, 259 F. Supp. 2d at 1261, or

an administrative review, see, e.g., Timken Co. v. United States, 354 F.3d 1334, 1341–42 (Fed. Cir.),

cert. denied, 125 S. Ct. 412 (2004) (“Timken”).

Despite these prior holdings, Corus argues that fundamental structural changes to the U.S.

Antidumping statute, as implemented in the Uruguay Round Agreements Act (“URAA”), render

zeroing inherently unreasonable, citing recent WTO decisions for further support that zeroing is no

longer reasonable. See supra note 1. The Federal Circuit, however, in addressing arguments similar

to the ones Corus now presents before the court, (1) expressly affirmed the reasonableness of

Commerce’s use of zeroing in an antidumping administrative review, and (2) accorded no deference

to Corus’s cited WTO cases, again concluding that WTO decisions are not binding on the U.S. and

cannot trump domestic legislation. See Corus Staal BV v. Dep’t of Commerce, 395 F.3d 1343,

1346–49 (Fed. Cir. 2005) (“Corus Staal II”) (holding that (1) “[o]ur decision in Timken addressed

Commerce’s interpretation of section 1677(35);” and (2) “[w]e give Commerce substantial deference

in its administration of the statute because of the foreign policy implications of a dumping

10
19 U.S.C. § 1677(35)(A). The statute states: “The term ‘dumping margin’ means
the amount by which the normal value exceeds the export price or constructed export price of
the subject merchandise.” (emphasis added).
11
19 U.S.C. § 1677(35)(B). The statute states: “The term ‘weighted average
dumping margin’ is the percentage determined by dividing the aggregate dumping margins
determined for a specific exporter or producer by the aggregate export prices and constructed
export prices of such exporter or producer.” (emphasis added).
Court No. 04-00316 Page 12

determination”). While it is highly debatable whether the intricacies of margin calculation involve

foreign policy, the Government’s response to WTO decisions vary; and, as the Federal Circuit noted,

a court should “not attempt to perform duties that fall within the exclusive province of the political

branches.” Id. at 1349. Because decisions by the Federal Circuit are binding on this court, Corus’s

arguments regarding the reasonableness of zeroing, therefore, must fail.

Corus’s final argument was also addressed by the Federal Circuit in Corus Staal II; however,

Corus now relies on changed facts. Specifically, Corus attempts to capitalize on the Federal

Circuit’s caveat in Corus Staal II: “[W]e . . . refuse to overturn Commerce’s zeroing practice based

on any ruling by the WTO or other international body unless and until such ruling has been adopted

pursuant to the specified statutory scheme.” Id. (emphasis added). Corus argues that the WTO’s

Softwood Lumber decision, which prohibited the use of zeroing in calculating dumping margins

under the weighted-average-to-weighted-average methodology, has been “adopted pursuant to the

specified statutory scheme,” and therefore, the court should rule zeroing no longer reasonable, not

based on the WTO ruling itself, but on Commerce’s re-interpretation of its policy in the wake of the

adverse Softwood Lumber ruling.

Before any agency regulation or practice can be modified to conform to an adverse WTO

ruling, Commerce must follow the particular statutory scheme Congress enacted. See id. This

process mandates consultation between the various political branches of the Executive and Congress

“to determine whether or not to implement WTO reports and determinations and, if so implemented,

the extent of implementation.” Id.; see also 19 U.S.C. §§ 3533(f)–(g), 3538 (2000).12

12
These steps include: (1) consultation between the U.S. Trade Representative
(“USTR”), agency, relevant congressional committees, and the private sector; (2) notice and
(continued...)
Court No. 04-00316 Page 13

Corus submits that the “critical steps” had already been taken by the time of the Federal

Circuit’s decision in Corus Staal II.13 In Corus Staal II, the Federal Circuit was quite clear that it

“reject[ed] Softwood Lumber as nonbinding because the finding therein was not adopted as per

Congress’s statutory scheme.” 395 F.3d at 1349. Therefore, until all of the statutorily mandated

procedures have been fully complied with, it matters not whether the “critical steps” have already

been taken. Since the Federal Circuit issued its opinion in Corus Staal II, Commerce has

subsequently issued both its preliminary and final determinations to implement Softwood Lumber.

See Notice of Determination Under Section 129 of the Uruguay Round Agreements Act:

Antidumping Measures on Certain Softwood Lumber Products from Canada, Pl.’s Addendum 1 (Apr.

15, 2005) (“Sec. 129 Determ.”). Corus stresses that the determination has been forwarded to the

USTR, but Commerce correctly notes that the USTR still must direct the Department to implement

the determination, “in whole or in part.” Sec. 129 Determ. at 1, 38. See 19 U.S.C. § 3538(b)(4).14

Thus, the statutorily mandated procedure is incomplete.

(...continued)
comment; (3) publication of the modification and its explanation in the Federal Register; and
(4) further consultation between the USTR, agency, and relevant congressional committees
regarding implementation of the new determination.
13
Corus identifies the “critical steps” as (1) U.S. notification to the WTO that it
would implement the Softwood Lumber decision, (2) consultation with Commerce and
Congress, and (3) instruction by the USTR directing Commerce to draft a section 129
determination implementing Softwood Lumber. Pl.’s Reply Br. at 3 n.2.
14
19 U.S.C. § 3538(b)(4) states that “[t]he Trade Representative may, after consulting
with the administering authority and the congressional committees . . . , direct the administering
authority to implement, in whole or in part, the determination . . . .” (showing that even after a
final determination, the USTR need not instruct Commerce to implement it) (emphasis added).
Court No. 04-00316 Page 14

Even if the USTR had directed the Department to implement the determination in full, it still

would not be applicable to this case.15 Unlike a section 123 proceeding, which concerns

implementation of panel reports regarding a WTO member’s general practices, a section 129 report

only affects the implementation of the specific investigation at issue, in this case softwood lumber

from Canada. Compare URAA § 123, 19 U.S.C. § 3533, with URAA § 129, 19 U.S.C. § 3538.16

Moreover, the WTO Appellate Body’s report in Softwood Lumber made clear that the only issue

before it was zeroing “as applied” in that case to Canadian lumber: “no methodology, as such, has

been challenged.” Softwood Lumber, WT/DS264/AB/R at ¶ 63 (emphases in original). Further, even

if the general methodology were at issue, section 129(c)(1) of the URAA, 19 U.S.C. § 3538(c)(1),

explicitly provides that any section 129 redetermination by Commerce will only affect the

unliquidated entries of subject merchandise that “are entered, or withdrawn from warehouse, for

consumption on or after . . . the date on which the Trade Representative directs the administering

authority . . . to implement that determination.” 19 U.S.C. § 3538(c)(1)(A) (emphasis added). In its

section 129 determination, Commerce notes that the “SAA clearly provides, ‘such [section 129]

determinations have prospective effect only.’” URAA Statement of Administrative Action,

15
On April 27, 2005, in accordance with sections 129(b)(4) and 129(c)(1)(B) of the
URAA, 19 U.S.C. § 3538(b)(4), (c)(1)(B), the USTR, after consulting with Commerce and
Congress, directed the Department to implement the determination. See Antidumping Measures
on Certain Softwood Lumber Products from Canada, 70 Fed. Reg. 22,636 (Dep’t Commerce
May 2, 2005) (final determ. under sec. 129 of URAA) [hereinafter Final Section 129
Determination].
16
Section 123(f)(3) discusses generally “whether to implement the [WTO] report’s
recommendation” and section 123(g)(1) regards “[c]hanges in agency regulations or practice.”
19 U.S.C. § 3533(f)(3), (g)(1). Section 129, in contrast, discusses everything in terms of
“particular proceedings,” from the initial agency action, to the re-determination, to the
implementation of the re-determination. 19 U.S.C. § 3538.
Court No. 04-00316 Page 15

accompanying H.R. Rep. No. 103-316, at 1026 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4313

(“SAA”); Sec. 129 Determ. at 4; Final Sec. 129 Determ., 70 Fed. Reg. at 22,637.

Lastly, even Commerce’s section 129 determination implementing Softwood Lumber limits

the effect of the adverse WTO ruling. In the redetermination, Commerce changed its methodology

from using a weighted-average-to-weighted-average methodology, which was the subject of the “as

applied” challenge in Softwood Lumber, to using an individual-to-individual transaction

methodology. See Sec. 129 Determ. at 6, Final Sec. 129 Determ., 70 Fed. Reg. at 22,637.

Commerce’s change, however, is “not inconsistent with the findings of the panel or the Appellate

Body,” see 19 U.S.C. § 3538(b)(2), because the individual-to-individual methodology, as the WTO

Appellate Body noted, was not addressed by its Softwood Lumber ruling. Softwood Lumber,

WT/DS264/AB/R at ¶ 63. Underscoring the specificity of this change, Commerce noted that by

switching its methodology it was “not intending to implement an approach that applies to all

antidumping investigations.” Sec. 129 Determ. at 12; Final Sec. 129 Determ., 70 Fed. Reg. at 22,639.

Even with respect to the Softwood Lumber investigation, and despite employing the changed

methodology, Commerce still used zeroing. In its redetermination, Commerce stated that because

the WTO ruling “requires the offset for non-dumped sales [i.e., does not allow zeroing] only for a

weighted-average-to-weighted-average comparison, we have not applied the offset for non-dumped

sales [i.e., we have used zeroing] in our transaction-to-transaction comparison.” Id. Therefore, even

if the USTR directs Commerce to implement the process in one case, the overall process has not

changed.

In sum, the WTO decision-making process operates apart from the decision-making in this

court. WTO decision-making starts with an international agreement, which may not match the
Court No. 04-00316 Page 16

domestic statute and which is interpreted pursuant to different principles. From there, the process

follows an entirely separate implementation scheme. Had the Government appeared here saying it

had lost in the WTO, with respect to this very administrative determination, and it had complied with

the entire statutory framework, to the effect that it was reversing its position, even as to a past

determination, then the court would have to consider what to do. This, however, has not happened,

and the court is bound by circuit precedent upholding zeroing.

III. Commerce’s Change In Methodology For Selecting The Sales Used In
The Margin Calculation Is Reasonable And In Accordance With Law

Corus’s database consists of two categories of U.S. sales: constructed export price sales,

which were made through Corus’s U.S. affiliate, and export price sales, which were made by Corus.17

In the Preliminary Results, Commerce selected the U.S. sales to be included in the margin

calculation, regardless of whether the sale was CEP or EP, on the basis of whether the date of sale

was within the POR. This meant that certain EP sales—those with a date of sale prior to the POR

but with an entry date during the POR—were excluded from the margin calculation.

Prior to the Final Results, U.S. Steel argued in its case brief that the date of sale methodology

used to select U.S. sales was incorrect, as applied to Corus’s EP sales. In support, U.S. Steel showed

that, consistent with Commerce’s antidumping questionnaire, Commerce’s normal practice was to

17
“‘[E]xport price’ means the price at which the subject merchandise is first sold (or
agreed to be sold) before the date of importation by the producer or exporter of the subject
merchandise outside of the United States to an unaffiliated purchaser in the United States or to
an unaffiliated purchaser for exportation to the United States, as adjusted under subesection (c).”
19 U.S.C. § 1677a(a) (emphasis added).
“‘[C]onstructed export price’ means the price at which the subject merchandise is first
sold (or agreed to be sold) in the United States before or after the date of importation by or for
the account of the producer or exporter of such merchandise or by a seller affiliated with the
producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted
under subsections (c) and (d).” Id. at § 1677a(b) (emphasis added).
Court No. 04-00316 Page 17

use date of sale for CEP sales and date of entry for EP sales. See Commerce’s Antidumping Duty

Questionnaire (Jan. 9, 2003), at C-1, P.R. Doc. 207, Def.-Intervenor’s App., Tab 1, at 2 (“Report each

U.S. sale of merchandise entered for consumption during the POR, except: (1) for EP sales, if you

do not know the entry dates, report each transaction involving merchandise shipped during the POR;

and (2) for CEP sales made after importation, report each transaction that has a date of sale within

the POR.”). EP sales, which by statute must take place prior to importation (i.e., date of entry)

normally can be tied to entries during the period. CEP sales, on the other hand, which may take place

following importation, are often difficult or impossible to tie to specific entries.

In response, Corus argued that the sales-based approach used in the Preliminary Results

should be applied to all of its sales to ensure no transactions escape review because: (1) date of sale

corresponds to its audited financial records and its use would require no end-of-period

reconciliations, and (2) given the length of time between entry date and date of sale for the JIT

inventory sales, there likely would be entries sold from JIT inventory that would not be invoiced until

after the conclusion of the review period and, thus, too late to be captured by the review; and under

Commerce’s entry date methodology, such sales would never be reported because they could not be

included in any subsequent review. See Corus’s Reply Br., (Jan. 23, 2004), at 7–9, P.R. Doc. 80,

Pl.’s App., Tab 3, at 4–6; see also Issues Mem. to Steel from the Netherlands, at cmt. 10.

In the final results, Commerce rejected Corus’s position. Commerce stated that

We agree with petitioners. In accordance with the Department’s normal practice, for
those sales which occurred prior to importation, we have used the date of entry to
select those transactions used in our analysis. This methodology comports with the
Department’s standard administrative review questionnaire, which instructs
respondents to report such sales of merchandise which entered for consumption
during the POR. This methodology is also consistent with that used in other
antidumping duty administrative reviews. Thus, for these final results, we have
Court No. 04-00316 Page 18

amended our margin calculation program so that for sales which occurred prior to
importation, the entry date was used to define those sales used in our analysis.

Issues Mem. To Steel from the Netherlands (June 16, 2004), at cmt. 10, P.R. Doc. 398, Def.-

Intervenor’s App., Tab 6, at 4 (citation omitted). In implementing its decision, Commerce did the

following: (1) for sales classified as CEP, it continued to use the date of sale; (2) for sales classified

as EP, where the sale took place prior to importation, it used the date of entry; and (3) for sales

classified as EP, but where the invoice date (and hence the shipment date and presumed date of sale)

took place after importation, it used the date of sale.

A. Commerce Properly Used Its Normal Method For Corus’s CEP
And Pre-Importation EP Sales

Corus argues that Commerce should have used the date of sale methodology for all of its

sales. Corus further argues that Commerce may not use different bases (which it refers to as

“hybrid”) in the same administrative review to select the sales to be analyzed. U.S. Steel disagrees.

The statute does not specify whether Commerce should use the date of entry or the date of

sale as the basis on which to select transactions for review. See Helmerich & Payne, Inc. v. United

States, 22 CIT 928, 933, 24 F. Supp. 2d 304, 310 (1998) (“[T]he statute is silent with respect to the

universe of sales to be used in calculating dumping margins . . . .”). Commerce has adopted a

regulation, however, that gives it the flexibility to use date of sale, date of export, or date of entry,

as appropriate. The regulation provides that

[f]or requests received during the first anniversary month after publication of an
order . . . an administrative review under this section will cover, as appropriate,
entries, exports, or sales during the period from the date of suspension of liquidation
. . . to the end of the month immediately preceding the first anniversary month.

19 C.F.R. § 351.213(e)(1)(ii) (emphasis added).
Court No. 04-00316 Page 19

Commerce’s general preference is to use entries during the POR as the basis for selecting the

U.S. sales to be analyzed. In Certain Welded Carbon Steel Pipes and Tubes from Thailand, 63 Fed.

Reg. 55,578, 55,589 (Dep’t Commerce Oct. 16, 1998) (final admin. rev.), for example, Commerce

analyzed all U.S. sales that entered during the POR, stating that

[a]lthough the Department’s regulations at section 352.213(e) provide some flexibility
in this issue, the Department’s preference is to review sales based on entry dates
unless there are compelling circumstances that warrant a different approach to
determining the universe of sales to be examined during a particular review.

Id. at cmt. 9. Similarly, in Issues & Decision Memorandum to Certain Corrosion-Resistant Carbon

Steel Flat Products from Canada, 70 Fed. Reg. 13,458 (Dep’t Commerce Mar. 21, 2005) (final admin.

rev.), the Department explained that

[w]e note that in section 751(a)(2)(A) of the Act [19 U.S.C. § 1675(a)(2)(A)], a
dumping calculation should be performed for each entry during the POR. While
section 351.213(e) of the Department’s regulations does give the Department some
flexibility in this regard by stating that the review can be based on entries, exports, or
sales, it is our preference to base the review on entries where possible. In this case,
we find no compelling reason to move away from our standard practice of using
entries to determine the universe of U.S. sales to be reported for EP sales.

Id. at cmt. 5. See also Helmerich, 22 CIT at 935–36, 24 F. Supp. 2d at 311 (quoting Commerce as

stating that its “usual practice in export price situations is to review and assess duties on entries

within the POR, regardless of whether the sales occurred prior to the review period”). Therefore,

Commerce’s review of the EP sales in this case, based on the date of entry, is in accordance with its

standard methodology.

Furthermore, the court has upheld Commerce’s entry-based methodology as reasonable. In

Helmerich, the court upheld Commerce’s use of the date of entry as a selection criterion, even though

the merchandise that entered during the POR came from a foreign trade zone and had been sold to

the customer before the POR and before the antidumping duty order had been entered. 22 CIT at 928,
Court No. 04-00316 Page 20

938–39, 24 F. Supp. 2d at 306, 313–14. The court explained that the entry-based approach resulted

in a more accurate measure of dumping and ensured that all relevant sales were considered. Id. at

937–38, 24 F. Supp. 2d at 313.

Although Commerce’s general preference is to use the date of entry, it often uses the date of

sale as the selection criterion for CEP sales. This is because, in many CEP situations, the sale is

made after importation and it is often difficult or impossible to tie entries to sales. See id. at 938 n.9,

24 F. Supp. 2d at 313 (“In certain situations such as CEP situations where Commerce cannot tie

entries to future sales, or when the Department cannot ascertain entry dates, Commerce cannot

calculate margins based on sales linked to entries. Therefore, Commerce may resort to the less

accurate approach of calculating margins based on possibly unlinked sales during the POR.”); see

also Dynamic Random Access Memory Semiconductors of One Magabit or Above from the Republic

of Korea, 66 Fed. Reg. 30,688, 30,692 (Dep’t Commerce June 7, 2001) (prelim. admin. rev.) (using

sales made during the POR to calculate the weighted-average dumping margins for CEP

transactions). This approach has been upheld as reasonable.

In NSK Ltd. v. United States, 17 CIT 590, 594–95, 825 F. Supp. 315, 320 (1993), for

example, the court upheld Commerce’s decision to examine exporter’s sales price (“ESP”)

transactions (now CEP transactions under the URAA) on the basis of sales made during the POR.

In holding, inter alia, that Commerce’s review of all CEP sales made during the POR, rather than

review of only the subject merchandise entered and sold during the review period, was reasonable

and in accordance with the law, the court noted Commerce’s reasoning with respect to these CEP

sales: (1) there is usually a lag time between entry and sale, (2) entry data is often unavailable, (3)

a dumping margin cannot be determined without a sale, (4) dumping on sales made during the POR
Court No. 04-00316 Page 21

is representative of dumping on entries made during the POR, and (5) review of sales, which can

cover many entries of merchandise, can eliminate the need for conducting multiple reviews of the

same information. Id. at 595, 24 F. Supp. 2d at 320; see also Ad Hoc Comm. of S. Cal. Producers

of Gray Portland Cement v. United States, 19 CIT 1398, 1407, 914 F. Supp. 535, 544 (1995)

(upholding Commerce’s use of sales, rather than entries, during the POR to calculate a dumping

margin as selection criterion for CEP sales). Therefore, Commerce’s use of the date of sale as a

selection criterion for Corus’s CEP sales is in accordance with its standard procedure and is

reasonable.

Corus relies on Hynix Semiconductor, Inc. v. United States, 248 F. Supp. 2d 1297 (Ct. Int’l

Trade 2003), to argue that Commerce’s “hybrid” methodology—using date of entry to select those

EP transactions where the sale had occurred prior to importation, but using date of sale to select all

other EP and all CEP transactions—is unreasonable.18 In Hynix, the court sustained Commerce’s

decision to use the date of sale as the selection criterion for CEP sales at issue. Id. at 1303–04. The

court found that Commerce properly abandoned the method used in the preliminary results, where

it had calculated the dumping margin by using the CEP sales made during the POR, plus CEP entries

made during the period (which were sold after the POR). Id. at 1300. The court explained that

18
Corus also relies on Hynix to argue that Commerce should have continued to use the
same approach to be consistent with its Preliminary Results. Although the Hynix court did
recognize the value of being consistent across administrative reviews, see 248 F. Supp. 2d at
1304 (noting that Hynix involved the sixth administrative review), the review here, in contrast, is
only the first administrative review of Corus’s sales and hence, there is no prior review with
which to be consistent. See Helmerich, 22 CIT at 937 n.8, 24 F. Supp. 2d at 313 (“In contrast [to
Portable Electric Typewriters from Japan, 56 Fed. Reg. 56,393, 56,393 (Dep’t Commerce Nov.
4, 1991), which was a review covering the periods May 1, 1988, through April 30, 1989, and
May 1, 1989, through April 30, 1990, for an antidumping duty order entered in May 1980], this
case deals with a first administrative review. Therefore, Commerce was not constrained to
utilize a sales-based approach to remain consistent.”).
Court No. 04-00316 Page 22

“nothing in Commerce’s regulations supports the use of a hybrid sales plus POR-entries approach

for calculating dumping margins.” Id. at 1304. This case is different. Here, Commerce did not use

such a “hybrid” approach; it used two distinct approaches—sales during the POR for CEP

transactions and entries during the POR for pre-importation EP transactions—both of which were

previously upheld as reasonable.

Furthermore, in Circular Welded Non-Alloy Steel Pipe from the Republic of Korea, 63 Fed.

Reg. 39,071, 39,072 (July 21,1998) (am. final admin. rev.), Commerce followed this approach,

reviewing all CEP sales with a sale date during the POR and all EP sales with an entry date during

the POR.

Therefore, Commerce’s use of the date of entry to select Corus’s pre-importation EP sales,

and the date of sale to select Corus’s CEP sales is reasonable and in accordance with its prior

practice. Thus, as to these two categories, there is no error.

B. Commerce’s Use Of Sales Date To Select Corus’s “Post-Importation” EP Sales
Was Proper

Corus also argues that Commerce’s methodology was improper because Commerce reviewed

Corus’s pre-importation EP sales differently from its “post-importation” EP sales.

Commerce did use the date of sale to select those EP-classified sales that Corus invoiced after

importation. Yet, as discussed above, the statute defines EP sales as those transactions occurring

“before the date of importation” while CEP sales may occur “before or after the date of importation.”

See supra note 17. Thus, because the EP sales at issue could not be treated in the same manner as

the other EP sales, Commerce treated them as it treated CEP sales—by reviewing them according to

date of sale, because the same matching difficulties that exist for post-importation CEP sales also

exist for “post-importation” EP sales, as both sides admitted at oral argument.
Court No. 04-00316 Page 23

Corus argues that because the only parties to these “post-importation” EP sales were Corus

and the particular U.S. customer (not a U.S. affiliate), and because Corus maintained its own U.S.

inventory and invoicing, the sales, were in fact, properly classified as EP sales and should have been

selected on the same basis as other EP sales.19 In AK Steel Corp. v. United States, 226 F.3d 1361,

1369–70 (Fed. Cir. 2000), the Federal Circuit examined the definitions of EP and CEP and noted that

the two factors dispositive of the choice between the two classifications are (1) whether the sale takes

place inside or outside the United States, and (2) whether it is made by an affiliate. Referring to the

CEP definition, the court then defined the term “seller” as “one who contracts to sell” and the term

“sold” as the “transfer of ownership or title.” Id. at 1371.

First, with respect to the location factor, it is undisputed that the invoicing took place in the

U.S. after importation, which, as indicated, presents the same entry-sale disconnect normally

associated with CEP sales. With respect to the second factor, the record shows that Corus uses a

U.S.-based entity to facilitate these sales. This is particularly so in reference to the JIT inventory that

Corus maintains in the U.S. for certain customers. Corus’s U.S.-based affiliate, Corus Steel USA Inc.

(“CSUSA”) serves as a “facilitator, communications link and processor of certain documentation for

[Corus’s] U.S. imports and sales. CSUSA never takes title to, takes possession of, or resells Corus’

steel and does not possess negotiating authority over steel manufactured by [Corus].” See Corus

Resp. to Commerce Antidumping Duty Questionnaire (Jan. 30, 2003), at A-16, P.R. Doc. 13, Pl.’s

App., Tab 7, at 3.

19
Corus also argues that because the sales were “agreed to” in the Netherlands before
importation, they were EP sales. The definitions of both CEP and EP include the phrase “first
sold (or agreed to be sold).” 19 U.S.C. § 1677a(a), (b).
Court No. 04-00316 Page 24

Although CSUSA neither takes ownership of the steel nor becomes involved in the

contracting process, it appears that these sales could not be executed without CSUSA. Thus, because

these sales (1) were at least finalized in the U.S. post-importation, and (2) were“facilitated” by a

U.S.-based affiliate, it was understandable that Commerce selected them using the same basis that

it used to select CEP sales..

Finally, Corus could point to no distortion caused by this manner of selection. Commerce,

while not treating the sales as CEP sales for other purposes, selected the “post-importation” EP sales

for review based on a CEP sales date methodology because such sales had earmarks of CEP sales and

posed the same difficulty when trying to connect them to earlier entry dates. Therefore, Commerce’s

selection of Corus’s “post-importation” EP sales on the same basis as its CEP sales is reasonable.

CONCLUSION

Because Commerce’s use of zeroing, and its methodology for selecting sales used in the

margin calculation are reasonable and in accordance with the law, Corus’s Motion for Judgment on

the Agency Record is denied, and Commerce’s Final Results are sustained.

/s/ Jane A. Restani
Jane A. Restani
CHIEF JUDGE

Dated: New York, New York
This 19th day of July, 2005