Slip Op. 03-160
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
PEER BEARING COMPANY-CHANGSHAN, :
:
Plaintiff, :
:
v. : Court No.
: 02-00241
UNITED STATES OF AMERICA, :
:
Defendant, :
:
and :
:
THE TIMKEN COMPANY, :
:
Defendant-Intervenor. :
________________________________________:
Plaintiff, Peer Bearing Company-Changshan (“CPZ”), moves
pursuant to USCIT R. 56.2 for judgment upon the agency record
challenging the United States Department of Commerce, International
Trade Administration’s (“Commerce”) final determination, entitled
Final Results of New Shipper Reviews of Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, From the People’s Republic
of China (“Final Results”), 67 Fed. Reg. 10,665 (Mar. 8, 2002).
Specifically, CPZ contends that Commerce improperly rejected
the actual prices paid for steel inputs from its market-economy
supplier. CPZ further contends that Commerce’s determination that
it has reason to believe or suspect that the supplier’s prices were
subsidized, because there are generally available export subsidies
in the supplier’s home country, are baseless.
Held: CPZ’s 56.2 motion is denied. Commerce’s final
determination is affirmed.
Dated: December 12, 2003
Court No.02-00241 Page 2
Hume & Associates, PC (Robert T. Hume) for Peer Bearing
Company-Changshan, plaintiff.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (David D’Alessandris); of counsel:
Glenn R. Butterton, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, for the
United States, defendant.
Stewart and Stewart (Terence P. Stewart, Wesley K. Caine and
Amy A. Karpel) for The Timken Company, defendant-intervenor.
OPINION
TSOUCALAS, Senior Judge: Plaintiff, Peer Bearing Company-
Changshan (“CPZ”), moves pursuant to USCIT R. 56.2 for judgment
upon the agency record challenging the United States Department of
Commerce, International Trade Administration’s (“Commerce”) final
determination, entitled Final Results of New Shipper Reviews of
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
From the People’s Republic of China (“Final Results”), 67 Fed. Reg.
10,665 (Mar. 8, 2002).
Specifically, CPZ contends that Commerce improperly rejected
the actual prices paid for steel inputs from its market-economy
supplier. CPZ further contends that Commerce’s determination that
it has reason to believe or suspect that the supplier’s prices were
subsidized, because there are generally available export subsidies
in the supplier’s home country, are baseless.
Court No.02-00241 Page 3
BACKGROUND
This case concerns the new shipper reviews of the antidumping
duty order on tapered roller bearings (“TRBs”) and parts thereof,
finished and unfinished, from the People’s Republic of China
(“PRC”) for the period of review covering June 1, 2000, through
January 31, 2001. See Final Results, 67 Fed. Reg. at 10,666. On
November 29, 2001, Commerce published the preliminary results of
the subject review. See Preliminary Results of New Shipper Reviews
of Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People’s Republic of China, 66 Fed. Reg.
59,569. Commerce published the Final Results on March 8, 2002.
See Final Results, 67 Fed. Reg. 10,665.
JURISDICTION
The Court has jurisdiction over this matter pursuant to 19
U.S.C. § 1516a(a) (2000) and 28 U.S.C. § 1581(c) (2000).
STANDARD OF REVIEW
The Court will uphold Commerce’s final determination in an
antidumping administrative review 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) (2000); see NTN
Bearing Corp. Oof Am. v. United States, 24 CIT 385, 389-90, 104 F.
Supp. 2d 110, 115-16 (2000) (detailing the Court’s standard of
review for antidumping proceedings).
Court No.02-00241 Page 4
DISCUSSION
I. Commerce’s Determination to Reject Prices Paid by a Non-Market
Producer for Steel Inputs from a Market-Economy Supplier
A. Statutory Background
In conducting a new shipper review, Commerce determines the
antidumping margin by taking the difference between the normal
value (“NV”) and the United States price of the merchandise. When
merchandise is produced in a non-market economy country (“NME”),
such as the People’s Republic of China (“PRC”), there is a
presumption that exports are under the control of the state.
Section 1677b(c) of Title 19 of the United States Code provides
that, “the valuation of the factors of production shall be based on
the best available information regarding the values of such factors
in a market economy country or countries considered to be
appropriate by [Commerce].” 19 U.S.C. § 1677b(c)(1) (2000). The
statute, however, does not define the phrase "best available
information,” it only provides that, “[Commerce], in valuing
factors of production . . . , shall utilize, to the extent
possible, the prices or costs of factors of production in one or
more market economy countries that are--(A) at a level of economic
development comparable to that of the nonmarket economy country,
and (B) significant producers of comparable merchandise.” 19
U.S.C. § 1677b(c)(4). Consequently, Commerce is given broad
discretion “to determine margins as accurately as possible, and to
Court No.02-00241 Page 5
use the best information available to it in doing so.” Lasko Metal
Prods., Inc. v. United States, 43 F.3d 1442, 1443 (Fed Cir. 1994).
The antidumping duty statute authorizes, but does not mandate
that Commerce use surrogate countries to estimate the value of the
factors of production. In legislative history, Congress provided
Commerce with guidance by stating that, “[i]n valuing such factors
[of production], Commerce shall avoid using any prices which it has
reason to believe or suspect may be dumped or subsidized prices.”
H.R. Conf. Rep. No. 100-576, at 590 (1988), reprinted in 1988
U.S.C.C.A.N. 1547, 1623 (“House Report”). The House Report further
states that, “the conferees do not intend for Commerce to conduct
a formal investigation to ensure that such prices are not dumped or
subsidized, but rather intend that Commerce base its decision on
information generally available to it at that time.” H.R. Conf.
Rep. No. 100-576, at 590-91, reprinted in 1988 U.S.C.C.A.N. at
1623-24. In addition, Commerce has promulgated regulations
regarding the valuation of factors of production in the NME
context. The relevant regulations state that “where a factor is
purchased from a market economy supplier and paid for in a market
economy currency, the Secretary normally will use the price paid to
the market economy supplier.” 19 C.F.R. § 351.408(c)(1) (2000).
In gathering factual information from interested parties in an
antidumping duty proceeding, Commerce regulations set out time
limits for the submission of such information. See 19 C.F.R. §
Court No.02-00241 Page 6
351.301(b)(4) (2000). The regulations state that any submissions
of factual information are due no later than “100 days after the
date of publication of notice of initiation of the review, except
that factual information requested by the verifying officials from
a person normally will be due no later than seven days after the
date on which the verification of that person is completed . . . .”
Id.
B. Contentions of the Parties
1. CPZ’s Contentions
CPZ complains that Commerce’s interpretation of the House
Report is contrary to its plain language and leads to a result
contrary to law. See Pl.’s Mem. P. & A. (“CPZ’s Mem.”)at 15-20.
CPZ maintains that the House Report solely concerns the use of
surrogate values to determine NV in the NME context. See CPZ’s
Mem. at 16. CPZ further argues that the House Report does not
address the use of market-economy prices. CPZ alleges that
“Commerce has now stretched the Legislative History concerning
surrogate values to apply to whether it should use market-economy
prices as well.” CPZ’s Mem. at 16. Accordingly, CPZ asserts that
Commerce erred in rejecting actual market-economy prices paid. CPZ
contends that Commerce should have used these values instead of
surrogate values for steel inputs in its final calculation of NV.
Court No.02-00241 Page 7
CPZ challenges Commerce’s determination that it had “reason to
believe or suspect” that CPZ’s supplier’s prices were subsidized.
See id. at 21-22. CPZ argues that Commerce had no particularized
evidence that “would call [CPZ’s supplier’s] prices into question.”
Id. at 22. CPZ contends that the existence of general and non-
company specific subsidies in the supplier’s country do not provide
Commerce with reasonable grounds to believe or suspect the prices
paid were subsidized. See id. at 21-22. While CPZ recognizes that
the existence of generally available export subsidies may raise a
suspicion of subsidized prices, CPZ argues that it overcame such
suspicion. See id. at 21.
First, CPZ argues that Commerce’s determination that the
subsidies CPZ’s supplier could have benefitted from were de minimis
extinguished such a suspicion. See id. at 23. Second, CPZ
contends that it submitted statements from its supplier, stating
that the supplier did not benefit from any subsidies, which refuted
Commerce’s reason to believe or suspect subsidized prices. See id.
at 26-27. Consequently, CPZ contends that Commerce had no basis to
reject the market-economy prices paid to its supplier, and that
Commerce has established an arbitrary and capricious standard to
overcome any suspicion that its supplier’s prices are subsidized.
See id. at 24-26.
Finally, CPZ asserts that Commerce erred in rejecting its
February 28, 2002, submission, which was meant to alert Commerce of
Court No.02-00241 Page 8
its own previous decision in a different review prior to the
issuance of the Final Results. See CPZ’s Mem. at 28-29. CPZ
maintains that it filed the submission the day after Commerce
published a notice in the Federal Register extending the period to
complete CPZ’s review until March 5, 2002. See id. at 28. CPZ
argues that the House Report “requires Commerce to make a
determination as to reason to believe or suspect that prices may be
subsidized based on evidence available to it at the time it reaches
its decision.” CPZ’s Mem. at 28-29. CPZ contends that the
submission should have been considered, despite its untimeliness,
because it constituted evidence available prior to the rendering of
Commerce’s final decision. See id. at 29.
2. Commerce’s Contentions
Commerce responds that it had a reasonable basis to “believe
or suspect” that CPZ’s supplier’s prices were subsidized. See
Def.’s Mem. Opp’n CPZ Mot. J. Agency R. (“Def.’s Mem.”) at 20.
Commerce argues that it is not precluded from applying the “reason
to believe or suspect” standard when general subsidies are used.
See id. Rather, Commerce contends that a finding of significant,
non-specific export subsidies generally available may serve as
“particular and objective evidence” to support a “reason to believe
or suspect” that CPZ’s supplier’s prices were subsidized. Id. at
22. Commerce relied on a study undertaken in conjunction with a
Court No.02-00241 Page 9
previous review, which found significant generally available
subsidies in the supplier’s country, to infer that the steel inputs
purchased by CPZ may have been subsidized. See id. Commerce
contends that the existence of generally available subsidies in
CPZ’s supplier’s country allows the inference that the supplier’s
prices were subsidized. See id. at 21-22. Consequently, Commerce
asserts that its finding of significant, generally available
subsidies in the exporting market-economy supports a “reason to
believe or suspect” that prices of the input from CPZ’s supplier
were subsidized. See id. at 22.
Commerce further maintains that the antidumping duty statute
and accompanying legislative history do not require it to conduct
a formal investigation to support its decision to exclude dumped or
subsidized prices. See id. at 23-24. Rather, to determine whether
to exclude such prices, Commerce may use information generally
available to it. See id. at 23. In addition, Commerce asserts
that its finding of de minimis subsidies does not quash its “reason
to believe or suspect” that CPZ’s supplier’s prices were
subsidized. See id. at 25-26. Commerce maintains that the level
of subsidization is irrelevant in situations where a general export
subsidy has been found because a subsidy, regardless of how large,
may benefit exports from that country. See id. at 26.
Moreover, Commerce contends that CPZ did not present
sufficient evidence to negate its “reason to believe or suspect.”
Court No.02-00241 Page 10
See id. at 28. Commerce argues that the statements CPZ offered as
evidence, that its supplier did not benefit from subsidies, were
unsupported; that is, they did not contain sales, financial or
other empirical economic data. See id. Furthermore, Commerce
maintains that CPZ’s evidence was less credible than its own study
undertaken in conjunction with a previous review of TRBs from the
PRC known as the Market Economy Steel Memo of November 7, 2001.
See id.
Finally, citing 19 C.F.R. § 351.301(b)(4), Commerce alleges
that it did not err in rejecting CPZ’s February 28, 2002,
submission as untimely. See id. at 31. Commerce asserts that
under the regulations, “submission[s] of new factual information
for the final results of a new shipper review must be made no later
than 100 days after the date of publication of the notice of
initiation of the review.” Id. Consequently, Commerce maintains
that the submission was properly rejected because it was made more
than 100 days after the publication of notice of initiation of
review. See id.
3. Timken’s Contentions
Timken generally agrees with Commerce’s departure from its
normal practice of using market prices paid for inputs purchased
from a market-economy supplier when there is “reason to believe or
suspect” that the prices are subsidized. See Timken’s Resp. Pl.’s
Court No.02-00241 Page 11
Mot. J. Agency R. (“Timken’s Resp.”) at 12. Timken maintains that,
according to the House Report, Commerce correctly applied “the
reason to believe or suspect” standard. See Timken’s Resp. at 16-
17. In particular, Timken contends that Commerce reasonably
limited the reach of its own regulation and “revert[ed] back to the
statutory method of employing surrogate-country information.” Id.
at 18. Timken argues that, in doing so, Commerce “gave effect to
Congressional intent and conformed to the statutory scheme.” Id.
at 19. Timken also asserts that, according to the House Report
guidance, only minimal evidence is necessary to support Commerce’s
decision to reject prices paid by CPZ to its market-economy
supplier. See Timken’s Resp. at 19. Timken further contends that
“Commerce needs only such evidence as is sufficient to form a
belief or suspicion.” Id. at 26. Timken argues that Commerce’s
reliance upon its own prior study, where it analyzed countervailing
duty orders covering subsidy programs in CPZ’s supplier’s country,
is sufficient evidence to support Commerce’s rejection of actual
prices paid by CPZ. See id. at 20. Timken maintains that Commerce
reasonably drew the inference that CPZ’s supplier may have
benefitted from generally available subsidies. See id.
Timken additionally argues that, “it was clearly appropriate
for Commerce to rely on express legislative history to construe and
apply its own regulation.” Id. at 22. Timken asserts that the
statute does not direct Commerce to use actual price information to
Court No.02-00241 Page 12
calculate NV. See id. Rather, Commerce developed and codified the
practice of using actual prices into regulation as its normal NME
methodology. See id. Timken disagrees with CPZ’s interpretation
of the House Report and maintains that Commerce “reasonably read
the history as directing the agency to avoid all values that it
believed or suspected were unfair, when calculating fair values of
goods.” Timken’s Resp. at 22-23 (emphasis in original).
Finally, Timken agrees with Commerce that CPZ’s February 28,
2002, submission was untimely under Commerce’s regulations.
Alternatively, Timken argues that the rejection of the submission
was harmless because the information provided would not have
altered Commerce’s “reason to believe or suspect” that CPZ’s
supplier’s prices were subsidized. See id. at 32. Timken
maintains that “the controlling fact is the mere existence of
subsidy programs in the country in question.” Id. Consequently,
even the receipt of de minimis subsidies by a particular producer
would not have changed Commerce’s position, because the “basis for
believing or suspecting remains.” Id.
C. Analysis
1. Commerce Properly Applied the Reason to Believe or
Suspect Standard
A preliminary issue the Court must decide is whether Commerce
correctly applied the “reason to believe or suspect” standard to
support its decision to reject market prices CPZ paid to its
Court No.02-00241 Page 13
market-economy supplier. The Court recognizes that the House
Report concerns the selection of surrogate values to determine NV
in the NME context. Neither the statute nor the House Report
address the use of market value in the calculation of NV.1 The
Court has established, however, that “nothing in the antidumping
duty statute directs Commerce to employ actual prices paid to a
market economy supplier by an NME producer in NV calculations.”
China Nat’l Mach. Imp. & Exp. Corp. v. United States, 27 CIT __,
__, 264 F. Supp. 2d 1229, 1236 (2003). Furthermore, in Lasko, the
CAFC recognized that the purpose of the statute “is to prevent
dumping, an activity defined in terms of the marketplace.” 43 F.3d
at 1446. Therefore, the use of suspect prices to calculate NV,
even when paid to a market-economy supplier, would be contrary to
Congress’ intent.
The Court finds that when Commerce has reason to believe or
suspect that a market-economy supplier’s prices are subsidized,
Commerce may reject market prices paid to the supplier in favor of
1
CPZ contends that Commerce‘s construction of the House
Report is contrary to its plain language and leads to a result
Congress cannot have intended. CPZ’s Mem. at 16. The Court notes,
however, that legislative history is merely extrinsic evidence to
be used by a court in determining Congress’ intent when a statute
is silent or ambiguous. If a statute is silent or ambiguous, the
court’s role is to determine whether Commerce’s construction of the
statute is reasonable. Commerce is required to reasonably
interpret the statute and not the legislative history.
Court No.02-00241 Page 14
surrogate prices for its calculation of NV.2 The Court is
unconvinced by CPZ’s argument that Commerce’s regulations require
Commerce to use actual prices paid whenever available. The Court
finds that the applicable regulations do not require Commerce to
use the market value over a surrogate value. The regulations state
that Commerce “normally will value the factor using the price paid
to the market economy supplier.” 19 C.F.R. § 351.408 (c)(1). The
regulation merely advises Commerce to use actual market values to
calculate NV for an NME supplier in certain circumstances. As the
Court stated, “while Commerce will use market values under normal
circumstances, under certain circumstances Commerce may choose not
to do so.” China Nat’l, 27 CIT at __, 264 F. Supp. 2d at 1237,
(noting that the regulation “merely indicates a preference for
market prices”); see also Anshan Iron & Steel Co., Ltd. v. United
States, 27 CIT __, __, 2003 Ct. Intl. Trade LEXIS 109, at *40 (CIT
2003) (stating that the language “merely suggests a particular
methodology, but does not impose upon Commerce the requirement of
selecting the market-economy price of a respondent’s purchases to
2
The Court notes that the use of surrogate values by Commerce
has been determined to be contrary to the intent of the law “‘where
we can determine that a NME producer’s input prices are market
determined, accuracy, fairness, and predictability are enhanced by
using those prices.’” Lasko, 43 F.3d at 1446 (quoting Oscillating
Fans and Ceiling Fans from the People’s Republic of China, 56 Fed.
Reg. 55271, 55275 (Dep’t Comm. 1991) (final determination)(emphasis
added)). If the prices paid are not market determined, however,
Commerce in pursuit of the law’s intent may reject actual prices
paid.
Court No.02-00241 Page 15
the exclusion of more appropriate values”).
While the Court recognizes that surrogate country values are
only an estimation of what the product’s NV would have been if the
NME were a market-economy country, see Rhodia, Inc. v. United
States, 25 CIT __, __, 185 F. Supp. 2d 1343, 1351 (2001),
Commerce’s decision to use actual prices paid or surrogate values
is predicated on which values provide a more accurate NV. See
Lasko, 43 F.3d at 1446, (noting that the purpose of the statute is
to prevent dumping and that it “sets forth procedures in an effort
to determine margins ‘as accurately as possible’”) (quoting Rhone
Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir.
1990)). When Commerce has substantial evidence that prices paid to
a market-economy supplier are not market determined, then the “use
of such prices would undermine ‘accuracy, fairness, and
predictability,’ in the calculation of margins and contravene the
antidumping and countervailing duty statute . . . .” China Nat’l,
27 CIT at __, 264 F. Supp. 2d at 1237 (quoting Lasko, 43 F.3d at
1446). The overarching principle of the statute prevents the Court
from concluding “that Congress would condone the use of any value
where there is ‘reason to believe or suspect’ that it reflects
dumping or subsidies.” China Nat’l, 27 CIT at __, 264 F. Supp. 2d
at 1238.
Section 1677b(c)(1) of Title 19 of the United States Code
directs Commerce to use “the best available information” concerning
Court No.02-00241 Page 16
the values for factors of production from a market-economy when
calculating the NV for a product exported from an NME country, such
as the PRC. See China Nat’l, 27 CIT at __, 264 F. Supp. 2d at
1234. The CAFC has reasoned that “there is much in the statute [19
U.S.C. § 1677b(c)(1) and (4)] that supports the notion that it is
Commerce’s duty to determine margins as accurately as possible, and
to use the best information available to it in doing so.” Lasko,
43 F.3d at 1443; see also Shakeproof Assembly Components, Div. of
Ill. Tool Works, Inc. v. United States, 268 F.3d 1376, 1382 (Fed.
Cir. 2001).
The Court’s role in this case is not to evaluate whether the
information Commerce used was the best available, but rather
whether Commerce’s choice of information is reasonable.3 See China
Nat’l, 27 CIT at __, 264 F. Supp. 2d at 1236. Commerce’s
discretion in choosing its information is limited by the statute’s
ultimate goal “to construct the product’s normal value as it would
have been if the NME country were a market economy country.”
Rhodia, 25 CIT at __, 185 F. Supp. 2d at 1351. While Commerce
enjoys broad discretion in determining what constitutes the best
3
The statute’s silence regarding the definition of “best
available information” provides Commerce with “broad discretion to
determine the ‘best available information’ in a reasonable manner
on a case-by-case basis.” Timken Co. v. United States, 25 CIT __,
__, 166 F. Supp. 2d 608, 616 (2001). Furthermore, in evaluating
the data, the statute does not require Commerce to follow any
single approach. See Luoyang Bearing Factory v. United States, 26
CIT __, __, 240 F. Supp. 2d 1268, 1284 (2002).
Court No.02-00241 Page 17
information available to calculate NV, Commerce may not act
arbitrarily in reaching its decision. If Commerce’s determination
of what constitutes the best available information is reasonable,
then the Court must defer to Commerce. If Commerce reasonably
believed or suspected that CPZ’s supplier’s prices were subsidized,
then Commerce could decide that surrogate prices were the best
information available. Based upon this determination, Commerce has
authority under the antidumping duty statute to use such values
instead of the actual prices paid by CPZ in calculating NV.
2. Commerce Had Reason to Believe or Suspect that
CPZ’s Supplier’s Prices Were Subsidized
The Court must determine whether Commerce had “reason to
believe or suspect” that CPZ’s supplier’s prices were distorted by
subsidies. In China Nat’l, 27 CIT at __, 264 F. Supp. 2d at 1239,
the Court recognized that the applicable standard has no statutory
definition. The Court noted, however, that “in order for
reasonable suspicion to exist there must be ‘a particularized and
objective basis for suspecting’ the existence of certain proscribed
behavior, taking into account the totality of the circumstances,
the whole picture.” Id. (quoting Al Tech Specialty Steel Corp. v.
United States, 6 CIT 245, 247, 575 F. Supp. 1277, 1280 (1983)).
While Commerce must support its determinations with “substantial,
specific and objective evidence,” China Nat’l, 27 CIT at __, 264 F.
Supp. 2d at 1240, the Court agrees with Commerce that the
Court No.02-00241 Page 18
antidumping duty statute does not require a formal investigation.
Congress did not intend for Commerce to undertake an investigation
to determine whether prices were in fact subsidized. Rather, the
statute and House Report merely require Commerce to have a “reason
to believe or suspect” that prices are being subsidized.
Consequently, to determine whether there is a “reason to believe or
suspect” that prices are subsidized, Commerce may rely on
information generally available to it to support its determination.
To conclude that it has reason to believe or suspect that prices
are subsidized, Commerce must rely on information generally
available to it that adequately supports the reasons given for such
a determination.
The Court finds that Commerce based its determination to
reject the prices CPZ paid its supplier on evidence that adequately
supports its decision. Commerce’s reason to believe or suspect
that CPZ’s supplier’s prices were subsidized stemmed from a study,
undertaken in connection with a previous investigation of steel
products, in which Commerce discovered significant subsidies.
These subsidies were not company specific, but were generally
available in the exporting market-economy country. CPZ contends
that these subsidies are de minimus and, therefore, do not support
Commerce’s decision to reject the actual prices paid. The level of
subsidization does not prevent Commerce from determining that it
has “reason to believe or suspect” that prices paid are subsidized.
Court No.02-00241 Page 19
Any level of subsidization found in the exporting country is enough
evidence to support a determination that Commerce has “reason to
believe or suspect” that prices are distorted. The Court finds
that Commerce made a logical inference that CPZ’s supplier may have
benefitted from the generally available subsidies.4 Without
conducting a formal investigation, Commerce used information
available to it to adequately support its decision to exclude
actual prices paid by CPZ.
Once Commerce presents adequate evidence to support its
“reason to believe or suspect” that prices are subsidized, a
rebuttable presumption is established that the prices paid are
distorted. See Luoyang Bearing Factory v. United States, 27 CIT
__, __, 2003 Ct. Intl. Trade LEXIS 142 at *10 (CIT 2003). The
presumption is that the market-economy supplier benefitted from
subsidies. Based on this presumption, Commerce may choose to
discard the prices paid and use surrogate values to calculate NV.
The presumption, however, is not conclusive. The presumption
shifts the burden to the party challenging Commerce’s determination
to present evidence demonstrating that its supplier did not benefit
4
CPZ asserts that Commerce did not investigate whether its
supplier received any subsidies and that the supplier has never
been a respondent in any countervailing or antidumping duty
investigation or reviews Commerce relies upon to support its
determination. The Court notes that contrary to CPZ’s assertion,
the statute does not require Commerce to conduct a formal
investigation. Rather, Commerce is merely required to base its
determination upon information generally available.
Court No.02-00241 Page 20
from such subsidies.5
The Court finds that CPZ did not present enough evidence to
rebut this presumption. CPZ contends that it “attempted to
overcome Commerce’s suspicion with a statement from its supplier
that it did not benefit from any subsidies.” CPZ’s Mem. at 26-27.
The Court, however, agrees with Commerce that the statements placed
on the record by CPZ do not controvert Commerce’s “reason to
believe or suspect” that its supplier benefitted from generally
available subsidies.6 The statements did not contain financial
data or any other information indicating that the supplier’s prices
were not subsidized. The Court recognizes that manufacturers, such
as CPZ, may present evidence other than financial data and
empirical economic information to rebut the presumption of
benefitting from subsidies. However, if there was conclusive
evidence to support the statements that its supplier did not
benefit from subsidies, CPZ would certainly have placed such
5
Sufficient evidence that the prices paid were market-
determined, for example, would satisfy the manufacturer’s burden.
Additionally, credible evidence that the supplier did not
participate in any subsidies programs would satisfy the burden.
6
One of the statements presented to Commerce by CPZ was a
letter from the General Manager of CPZ’s supplier’s overseas sales
department stating that the company did not benefit from subsidies.
The other was a signed declaration by another employee of CPZ’s
supplier stating that the supplier does not produce the type of
steel Commerce had found to benefit from subsidies in its study.
Court No.02-00241 Page 21
evidence on the record.7 CPZ did not effectively rebut the
presumption that CPZ’s supplier benefitted from subsidies.
Consequently, Commerce’s determination that there was a “reason to
believe or suspect” that the prices paid were subsidized was
reasonable and in accordance with law.
3. Commerce Appropriately Rejected CPZ’s Submission as
Untimely
Commerce’s regulations clearly set out the deadlines for
submissions of factual information for new shipper reviews. See 19
C.F.R. § 351.301(b)(4). The regulations state that a submission of
factual information must be made no more than 100 days after the
date of publication of notice of initiation of the review. While
CPZ maintains that Commerce should not have rejected its
submission, the Court does not agree. The date of the notice was
January 31, 2001, and the submission was made more than one year
later, on February 28, 2002. The regulation is clear and CPZ
failed to adhere to the procedural deadline imposed by the
7
To overcome the suspicion, CPZ argues that “respondents are
now in the untenable position of having to ask that their suppliers
be investigated in order to rule out the possibility that their
supplier’s prices are subsidized,” and that “it may be impossible
for respondents like CPZ to overcome any suspicion that their
supplier’s prices are subsidized.” See CPZ’s Mem. at 26 (emphasis
in original). The Court notes, however, that CPZ could have
submited other evidence, such as economic data, to overcome the
presumption established against the actual prices paid. The Court
is unconvinced that the statements made by the employees of CPZ’s
supplier are the best available evidence that the supplier did not
benefit from the generally available subsidies.
Court No.02-00241 Page 22
regulations.
The Court has considered other arguments raised by CPZ
regarding Commerce’s failure to consider CPZ’s arguments and finds
that they are without merit.
CONCLUSION
The Court affirms Commerce’s final results and finds that the
rejection of actual prices paid by CPZ for steel inputs from its
market-economy supplier was in accordance with law.
______________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: December 12, 2003
New York, New York