2020 CIT 4
Ct. Int'l Trade2020Background
- Commerce investigated alleged dumping of Large Diameter Welded Pipe (LDWP) from Turkey for the period Jan. 1–Dec. 31, 2017; Commerce issued Final Results and an antidumping duty order (BMB assigned 5.11% rate).
- Plaintiff Borusan Mannesmann Boru (BMB) and several U.S. domestic producers challenged Commerce determinations on date of U.S. sale, a post‑sale downward price adjustment (late‑penalty allocation), Commerce's use of a "particular market situation" (PMS) adjustment to costs for the below‑cost test, and freight/warehousing adjustments involving an affiliate (Borusan Lojistik).
- Commerce used invoice date for two U.S. sales (rejecting BMB's claim that final purchase orders fixed material terms earlier) and adjusted certain home‑market sales downward for a post‑sale penalty allocation, but only credited BMB with a partial share.
- Commerce adjusted BMB's costs for an alleged PMS when conducting the sales‑below‑cost test, and applied its 98–102% arm’s‑length range test to affiliate freight/service charges, substituting unaffiliated prices where appropriate.
- The Court sustained: (1) Commerce’s recognition of a post‑sale price adjustment (but remanded the amount), and (2) Commerce’s freight/warehousing adjustment methodology. The Court remanded for reconsideration the date‑of‑sale determination and ordered that Commerce may not adjust costs for PMS in the sales‑below‑cost test (i.e., PMS adjustments to COP for that test are contrary to law).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Date of U.S. sale (invoice vs. purchase order) | BMB: final purchase orders for long‑term, custom contracts fixed material terms before invoice; invoice date presumption should be rebutted | Gov./Domestic producers: Commerce reasonably used invoice date under 19 C.F.R. §351.401(i); BMB didn't show earlier date better reflects when material terms were fixed | Court: Commerce's use of invoice date was unsupported; remand for Commerce to reassess using proper application of the regulation and burdens (consider long‑term/custom contract evidence) |
| Post‑sale downward price adjustment (late‑penalty allocation) | BMB: entitled to full adjustment for the penalty it actually paid; contracts and joint‑venture documents show terms/indemnities predated investigation | Domestic producers: BMB failed to connect penalties to specific HM sales and withheld info; Gov.: Commerce reasonably verified and granted a partial adjustment | Court: Granting a post‑sale adjustment was supported, but Commerce must reconsider and quantify the amount on remand (sustain in principle; remand amount) |
| PMS adjustment to cost of production for sales‑below‑cost test | BMB: statute forbids PMS adjustments to COP for purposes of §1677b(b) sales‑below‑cost test; issue is pure question of law | Gov./Domestic producers: TPEA amended law to allow PMS consideration; Commerce reasonably adjusted COP to account for distorted steel market | Held: Court: PMS adjustments to COP for the sales‑below‑cost test are contrary to law; Commerce may not make such PMS adjustments under §1677b(b) (remanded/vacated) |
| Freight and related services (affiliated supplier) | BMB: Commerce applied a new arm’s‑length "test" improperly to services and lacked basis to reject affiliate prices | Gov./Commerce: Applied longstanding practice/98–102% arm’s‑length range and substituted unaffiliated prices or used costs when no unaffiliated comparators exist | Court: Commerce's use of the 98–102 test and its method for adjusting affiliate freight/warehousing is sustained |
Key Cases Cited
- Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034 (Fed. Cir. 1996) (standard: Court sustains Commerce unless unsupported by substantial evidence or contrary to law)
- Ereğli Demir ve Çelik Fabrikalari T.A.S. v. United States, 308 F. Supp. 3d 1297 (Ct. Int'l Trade 2018) (discusses invoice‑date presumption and rebuttal for date of sale)
- Jindal Poly Films Ltd. of India v. United States, 365 F. Supp. 3d 1379 (Ct. Int'l Trade 2019) (burden on party seeking post‑sale price adjustment and Commerce’s obligation to provide notice)
- Mid Continent Steel & Wire, Inc. v. United States, 219 F. Supp. 3d 1326 (Ct. Int'l Trade 2017) (affiliated‑party transactions and ordinary‑course‑of‑trade analysis)
- Thomas v. Nicholson, 423 F.3d 1279 (Fed. Cir. 2005) (statutory‑interpretation presumption: different language in adjacent provisions is purposeful)
- Papierfabrik August Koehler AG v. United States, 971 F. Supp. 2d 1246 (Ct. Int'l Trade 2014) (treatment of post‑sale price adjustments under Commerce regulations)
- Atar, S.r.L. v. United States, 637 F. Supp. 2d 1068 (Ct. Int'l Trade 2009) (examples sustaining Commerce findings of arm’s‑length or non‑arm’s‑length affiliated transactions)