Slip Op. 00-2
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
SKF USA INC. and SKF SVERIGE AB, :
:
Plaintiffs and :
Defendant-Intervenors, :
:
v. : Consol. Court No.
: 97-01-00054-S2
UNITED STATES, :
:
Defendant, :
:
and :
:
THE TORRINGTON COMPANY, :
:
Defendant-Intervenor :
and Plaintiff. :
________________________________________:
Plaintiffs and defendant-intervenors, SKF USA Inc. and SKF
Sverige AB (collectively “SKF”), move pursuant to USCIT R. 56.2 for
judgment upon the agency record challenging various aspects of the
Department of Commerce, International Trade Administration’s
(“Commerce”) final determination, entitled Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France,
Germany, Italy, Japan, Singapore, Sweden, and the United Kingdom;
Final Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews (“Final Results”), 61
Fed. Reg. 66,472 (Dec. 17, 1996). Defendant-intervenor and
plaintiff, The Torrington Company (“Torrington”), also moves
pursuant to USCIT R. 56.2 for judgment upon the agency record
challenging Commerce’s Final Results.
Specifically, SKF claims that Commerce erred in: (1)
disregarding SKF’s negative home market billing adjustment number
two values in calculating foreign market value; and (2) including
SKF’s zero-value United States transactions in its margin
calculations.
Torrington claims that Commerce committed several clerical
errors. Specifically, Torrington argues that Commerce: (1)
improperly converted the difference in merchandise (“DIFMER”)
Consol. Court No. 97-01-00054-S2 Page 2
variable; (2) improperly converted certain variables from Italian
lira to dollars; (3) improperly converted the variable cost of
manufacture (“VCOMH”); and (4) incorrectly computed home market
indirect selling expenses.
Held: SKF’s motion is granted in part and denied in part.
Torrington’s motion is granted. The case is remanded to Commerce
to: (1) exclude any transactions that were not supported by
consideration from SKF’s United States sales database and to adjust
the dumping margins accordingly; (2) use the appropriate exchange
rate to convert the DIFMER variable; (3) convert certain variables
to reflect that they were reported in hundreds of Italian lira; (4)
use the appropriate exchange rate to convert the VCOMH from Swedish
krona to United States dollars; and (5) correct the programming
language that calculates home market indirect selling expenses.
[SKF’s motion is granted in part and denied in part. Torrington’s
motion is granted. Case remanded.]
Dated: January 5, 2000
Steptoe & Johnson LLP (Herbert C. Shelley and Alice A. Kipel)
for SKF.
David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Velta A. Melnbrencis,
Assistant Director); of counsel: Mark A. Barnett, Attorney-Advisor,
Office of the Chief Counsel for Import Administration, United
States Department of Commerce, for defendant.
Stewart and Stewart (Terence P. Stewart, Wesley K. Caine,
William A. Fennell, Geert De Prest and Lane S. Hurewitz) for
Torrington.
OPINION
TSOUCALAS, Senior Judge: Plaintiffs and defendant-intervenors,
SKF USA Inc. and SKF Sverige AB (collectively “SKF”), move pursuant
to USCIT R. 56.2 for judgment upon the agency record challenging
various aspects of the Department of Commerce, International Trade
Administration’s (“Commerce”) final determination, entitled
Consol. Court No. 97-01-00054-S2 Page 3
Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof From France, Germany, Italy, Japan, Singapore,
Sweden, and the United Kingdom; Final Results of Antidumping Duty
Administrative Reviews and Partial Termination of Administrative
Reviews (“Final Results”), 61 Fed. Reg. 66,472 (Dec. 17, 1996).
Defendant-intervenor and plaintiff, The Torrington Company
(“Torrington”), also moves pursuant to USCIT R. 56.2 for judgment
upon the agency record challenging Commerce’s Final Results.
Specifically, SKF claims that Commerce erred in: (1)
disregarding SKF’s negative home market billing adjustment number
two values in calculating foreign market value (“FMV”); and (2)
including SKF’s zero-value United States transactions in its margin
calculations.
Torrington claims that Commerce committed several clerical
errors. Specifically, Torrington argues that Commerce: (1)
improperly converted the difference in merchandise (“DIFMER”)
variable; (2) improperly converted certain variables from Italian
lira to dollars; (3) improperly converted the variable cost of
manufacture (“VCOMH”); and (4) incorrectly computed home market
indirect selling expenses.
Consol. Court No. 97-01-00054-S2 Page 4
BACKGROUND
This case concerns the fifth review of the antidumping duty
order on antifriction bearings (other than tapered roller bearings)
and parts thereof (“AFBs”) imported to the United States during the
review period of May 1, 1993 through April 30, 1994.1 Commerce
published the preliminary results of the subject reviews on
December 7, 1995. See Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof From France, Germany, Japan,
Singapore, Sweden, Thailand, and the United Kingdom; Preliminary
Results of Antidumping Duty Administrative Reviews, Partial
Termination of Administrative Reviews, and Notice of Intent to
Revoke Order, 60 Fed. Reg. 62,817. Commerce published the Final
Results on December 17, 1996. See 61 Fed. Reg. at 66,472.
STANDARD OF REVIEW
The Court will uphold Commerce’s final determination in an
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) (1994).
1
Since the administrative reviews at issue were initiated
before January 1, 1995, here, June 22, 1994 and July 15, 1994, the
applicable law is the antidumping statute as it existed prior to
the amendments made by the Uruguay Round Agreements Act, Pub. L.
No. 103-465, 108 Stat. 4809 (1994). See Torrington Co. v. United
States, 68 F.3d 1347, 1352 (Fed. Cir. 1995).
Consol. Court No. 97-01-00054-S2 Page 5
DISCUSSION
I. Jurisdiction
The Court has jurisdiction over this matter pursuant to 19
U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c) (1994).
II. SKF’s Home Market Billing Adjustment Number Two Values
Title 19, United States Code, §§ 1677a and 1677b require
Commerce to determine the price actually charged to a customer both
in the home market, that is, FMV, and in the United States for the
merchandise at issue. See 19 U.S.C. §§ 1677a, 1677b (1988). The
actual price charged to a customer necessarily includes adjustments
for discounts or rebates paid by the company to the customer. In
this case, SKF reported billing adjustment two in the Swedish home
market which was used for debits and credits related to multiple
invoices, invoice lines or products. Credits to customers were
reported as negative values and decreased FMV. SKF did not report
any debits (positive values) for billing adjustment two, which
would have increased FMV.
In the Final Results, Commerce stated its intention to
differentiate between positive and negative billing adjustment
values by making upward adjustments to the home market price for
customer numbers that were positive and disregarding the reported
values for negative numbers. See 61 Fed. Reg. at 66,498.
Consol. Court No. 97-01-00054-S2 Page 6
SFK complains that Commerce’s disparate treatment of positive
and negative values for billing adjustment two has adverse effects.
First, SKF contends that disparate treatment of negative and
positive values distorts the calculation of FMV so that it does not
fairly represent the price actually paid by Swedish customers. See
SKF’s Br. Supp. Mot. J. Agency R. at 8-9. Specifically, SKF argues
that by rejecting the negative values, Commerce does not properly
take into account the credits granted to customers and, therefore,
does not decrease FMV to the extent it should. See id. at 7-9.
SKF claims that the price distortion results in a skewed
comparison between home and United States prices. See id. at 8.
Second, SKF asserts that Commerce cannot include all positive
values as direct adjustments in the margin calculations without
determining whether they include out-of-scope merchandise. See id.
at 14. SKF contends that Commerce deviates from its principle of
rejecting values derived from allocations by accepting the positive
values. See id.
SKF, however, reported no positive billing adjustments in the
Swedish market. SKF’s arguments regarding the disparate treatment
of positive and negative values are relevant only where both
positive and negative billing adjustments are reported.2 Because
2
For example, SKF reported positive as well as negative
billing adjustments in the German market. See SKF USA Inc. v.
Consol. Court No. 97-01-00054-S2 Page 7
SKF did not report positive values, the Court will only consider
whether Commerce’s treatment of the negative values was in
accordance with law.
Commerce denied the negative values, arguing that such action
was proper since SKF did not tie the adjustments to specific
transactions nor grant them as a fixed percentage across sales.
See Def.’s Partial Opp’n to Pls.’ Mots. J. Agency R. at 2; Final
Results, 61 Fed. Reg. at 66,499. The Court finds that Commerce’s
action was proper. It is well-established that Commerce’s decision
to deny a direct adjustment to FMV is reasonable and proper if the
adjustment sought is not reported on either a transaction-specific
basis or as a fixed and constant percentage of the sales price of
all transactions for which it was reported. See SKF USA Inc. v.
United States, 19 CIT 625, 633, 888 F. Supp. 152, 159 (1995); SKF
USA Inc. v. United States, 19 CIT 79, 86, 875 F. Supp. 847, 853
(1995); SKF USA Inc. v. United States, 19 CIT 54, 65, 874 F. Supp.
1395, 1405 (1995). “The party seeking a direct price adjustment
bears the burden of proving entitlement to such an adjustment.”
SKF USA Inc. v. United States, 180 F.3d 1370, 1377 (Fed. Cir. 1999)
(citing Fujitsu General Ltd. v. United States, 88 F.3d 1034, 1040
(Fed. Cir. 1996)).
United States, 23 CIT __, Slip. Op. 99-127, 1999 WL 1129708 (Dec.
2, 1999).
Consol. Court No. 97-01-00054-S2 Page 8
Because SKF’s improper reporting made it impossible for
Commerce to determine if the claimed adjustment pertained to the
subject merchandise, Commerce determined that SKF had not met its
burden. The Court finds, therefore, that Commerce properly
declined to make the negative adjustments because of SKF’s failure
to tie the expenses to specific transactions or products. See
Torrington Co. v. United States, 82 F.3d 1039, 1050-51 (Fed. Cir.
1996). Since Commerce’s decision to deny the negative adjustment
was in accordance with law, Commerce’s determination is affirmed.
III. SKF’s Zero-Value United States Transactions
SKF argues that in light of NSK Ltd. v. United States, 115
F.3d 965, 975 (Fed. Cir. 1997), the Court should remand the matter
to Commerce to exclude SKF’s zero-value transactions from its
margin calculations. See SKF’s Br. Supp. Mot. J. Agency R. at 31.
SKF’s rationale is that the United States transactions at zero
value, such as prototypes and samples, do not constitute true sales
and, therefore, should be excluded from the margin calculations
pursuant to NSK. See id. The identical issue was decided by this
Court in SKF USA Inc. v. United States, 23 CIT __, Slip Op. 99-56,
1999 WL 486537 (June 29, 1999).
Torrington concedes that a remand may be necessary in light of
NSK, but argues that further factual inquiry by Commerce is
Consol. Court No. 97-01-00054-S2 Page 9
necessary to determine whether the zero-price transactions were
truly without consideration or if they were matched to sales above
fair value in an effort to allow the customer to purchase
merchandise below fair value. See Torrington’s Br. Resp. to SKF’s
Mot. J. Agency R. at 11. Torrington argues that only if the
transactions are truly without consideration can they fall within
NSK’s exclusion. See id. at 12.
Commerce concedes that the case should be remanded to it to
exclude the sample transactions for which SKF received no
consideration from SKF’s United States sales database. See Def.’s
Partial Opp’n to Pls.’ Mots. J. Agency R. at 27.
Commerce is required to impose antidumping duties upon
merchandise that “is being, or is likely to be, sold in the United
States at less than its fair value.” 19 U.S.C. § 1673(1) (1988).
A zero-priced transaction does not qualify as a “sale” and,
therefore, by definition cannot be included in Commerce’s FMV
calculation. See NSK, 115 F.3d at 975 (holding “that the term sold
. . . requires both a transfer of ownership to an unrelated party
and consideration”). Thus, the distribution of AFBs for no
consideration falls outside the purview of 19 U.S.C. § 1673.
Consequently, the Court remands to Commerce to exclude any
Consol. Court No. 97-01-00054-S2 Page 10
transactions that were not supported by consideration from SKF’s
United States sales database and to adjust the dumping margins
accordingly.
IV. Clerical Errors
Torrington alleges that Commerce committed four clerical
errors and requests a remand to allow Commerce to rectify them.
First, Torrington alleges that the computer program (“program”)
for the Final Results does not properly convert the DIFMER variable
from Swedish krona to United States dollars. See Torrington’s Mot.
J. Agency R. at 5. Second, Torrington alleges that the program
understates the value of certain variables by a factor of one
hundred because the program did not account for the fact that SKF
had reported the variables in hundreds of Italian lira. See id.
Third, Torrington alleges that the program does not properly
convert the VCOMH, and should be changed to reflect the fact that
SKF reports VCOMH in Swedish krona. See id. at 6. Fourth,
Torrington alleges that the program incorrectly computes home
market indirect selling expenses because it contains a
typographical error which repeats the program language. See id.
Commerce agrees that a remand is necessary to correct the
errors. See Def.’s Partial Opp’n to Pls.’ Mots. J. Agency R. at
28.
Upon review of the record, this Court concludes that the
computer program indeed contained clerical errors. The Court,
therefore, remands to Commerce to: (1) use the appropriate exchange
rate to convert the DIFMER variable; (2) convert certain variables
to reflect that they were reported in hundreds of Italian lira; (3)
use the appropriate exchange rate to convert the VCOMH from Swedish
krona to United States dollars; and (4) correct the programming
language that calculates home market indirect selling expenses.
CONCLUSION
The case is remanded to Commerce to: (1) exclude any
transactions that were not supported by consideration from SKF’s
United States sales database and to adjust the dumping margins
accordingly; and (2) correct the clerical errors pertaining to the
DIFMER variable, the reporting of variables in hundreds of Italian
lira, the VCOMH variable and home market indirect selling expenses.
Commerce is affirmed in all other respects.
_____________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: January 5, 2000
New York, New York