BEIJING TIANHAI INDUSTRY CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Norris Cylinder Company, Defendant-Intervenor.
Court No. 12-00204
United States Court of International Trade
Feb. 6, 2015
Slip Op. 15-14
EATON, Senior Judge
CONCLUSION
Because Defendant could not reasonably foresee the negligence of a third party that proximately caused Plaintiff‘s injuries, Defendant‘s motion for summary judgment is GRANTED. For reasons stated in Part I above, Plaintiff‘s motion to strike Defendant‘s reply brief is DENIED. The Clerk of Court is directed to enter the appropriate judgment.
Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Matthew D. Walden, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C.
Edward M. Lebow and Nora L. Whitehead, Haynes and Boone, LLP, of Washington, D.C., argued for defendant-intervenor.
OPINION
EATON, Senior Judge:
This subsidy case is before the court on Beijing Tianhai Industry Co., Ltd.‘s (“BTIC” or “plaintiff“) motion for judgment on the agency record challenging the final determination of the United States Department of Commerce (“Commerce” or the “Depаrtment“) in High Pressure Steel Cylinders From the People‘s Republic of China,
BACKGROUND
In June 2011, in response to a petition filed by defendant-intervenor Norris Cylinder Company (“defendant-intervenor“), the Department initiated a countervailing duty investigation of high pressure steel cylinders from the People‘s Republic of China (“PRC“). High Pressure Steel Cylinders From the PRC,
BTIC answered the questionnaires for itself and Tianjin Tianhai, describing their supply chain and indicating that one producer whose steel tube is at issue was a non-cross-owned affiliate of BTIC (the “Affiliated Producer“).6 The government of the PRC (the “PRC government“) provided the Department with ownership information for another steel tube producer (the “Unaffiliated Producer“), with which BTIC had no affiliate relationship.8
On October 18, 2011, the Department issued a Preliminary Determination, in which it found that the Affiliated Producer and the Unaffiliated Producer were both authorities under
To measure the adequacy of remuneration, Commerce sought to construct a benchmark price,9 representative of the market price for steel tube, in accordance with
Using ownership information provided by the PRC government, the Department found that 38 percent of steel tube production in the PRC during the POI was manufactured by companies that had been designated by Commerce as state-owned. Preliminary Determination,
Following the Preliminary Determination, in its case brief before Commerce, plaintiff argued that the transactions involving the third-party trading companies could not be countervailed because (1) the Affiliated Producer was an affiliate of BTIC and Tianjin Tianhai, and (2) the Unaffiliated Producer was not an authority. See BTIC Group‘s Administrative Case Br. at 16, 23, CD 92 at bar code 3065133-01 (Mar. 23, 2012), ECF Dkt. No. 18 (“BTIC‘s Case Br.“).
Plaintiff also submitted additional proposed benchmark information in the form of SteelOrbis prices of steel tube from Ukraine and Iran. When submitting these prices, plaintiff argued that the value of the benefit, if in fact there was any, should have been calculated using the Ukrainian price data it supplied, because those prices were more specific to the size of steel tube that BTIC and Tianjin Tianhai used. See BTIC‘s Case Br. at 35–37. Alternatively, plaintiff proposed that, in the event that Commerce did not usе the Ukraine data, it should instead use the lowest world market price during each month. BTIC‘s Case Br. at 38. As a third option, plaintiff suggested that the Department average all of the prices on the record to obtain a world market benchmark price. See BTIC‘s Case Br. at 41.
In addition, plaintiff contended that Commerce should not have added the VAT and import duties. BTIC‘s Case Br. at 41–42. According to plaintiff, neither BTIC nor Tianjin Tianhai was required to pay the VAT or import duties on imported steel tube used for export. See BTIC‘s Case Br. at 41.
In its Final Determination, the Department made one departure from the Preliminary Determination. Rather than rely on the Italian prices as the world market price, as it had done in its Preliminary Determination, Commerce accepted plaintiff‘s suggestion and averaged the prices available on the record (from Ukraine, Italy, and Iran) to calculate the benchmark price. See Issues & Dec. Mem. at cmt. 8. This action followed.
STANDARD OF REVIEW
“The court shall hold unlawful any determination, finding, or conclusion found
DISCUSSION
I. LEGAL FRAMEWORK
Under the trade statute, a countervailable subsidy is found to be present where “an authority . . . provides a financial contribution . . . to a person and a benefit is thereby conferred.”
II. THE DEPARTMENT‘S DETERMINATION TO COUNTERVAIL BTIC‘S PURCHASES OF STEEL TUBE
A. The Department Reasonably Determined that the Unaffiliated Producer Was an “Authority”
In the Final Determination, the Department determined that the Unaffiliated Producer was an authority, for purposes of
Plaintiff contends that the Department should not have relied upon the ownership percentages found in the capital verification report. Br. in Supp. of Pl.‘s Rule 56.2 Mot. for J. upon the Agency R. 25–27 (ECF Dkt. No. 31) (“Pl.‘s Br.“). Rather, it insists that Commerce should have used the percentages in the articles of association. Pl.‘s Br. 25–27. According to plaintiff, given the close timing of the articles of association and the capital verification report, such a non-capital-affecting share transfer must have occurred. See Pl.‘s Br. 26–27. That is, for plaintiff, the ownership percentages in the company‘s articles of association reflected the company‘s “current” (most сontemporaneous to the POI) ownership, and thus, the Unaffiliated Producer was not majority-owned by the PRC government. See Pl.‘s Br. 26 (“[I]n addition to the [PRC government] indicating that capital verification reports, in general, are not required for share transfers that do not involve a change in capital, the articles of association here dated a few days prior to the capital verification report specifically indicate that just such a share transfer occurred. The only reasonable conclusion from this fact is that the articles of association reflect the company‘s current ownership.“).
Plaintiff also argues that the capital verification report is actually less contemporaneous with the POI than the articles of association. See Pl.‘s Br. 27. Thus, it maintains that, although the capital verification report post-dates the articles of association, the articles of association make reference to anticipated future changes in ownership, including reference to an anticipated capital increase after the date of the capital verification report. Pl.‘s Br. 27 (citing Letter from Francis J. Sailer, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, Counsel for BTIC, to Hon. Rebecca M. Blank, Acting Secretary of Commerce, Import Administration, U.S. Department of Commerce at 527, CD 27 at bar code 3028411-02 (Sept. 7, 2011), ECF Dkt. No. 18) (“The reference to a future date beyond the ‘amended’ date[,] . . . which is after the date of the capital verification report further indicates that the articles of association are more contemporaneous than the capital verification.“). For plaintiff, the Department‘s determination that the Unaffiliated Producer was majority-owned by the PRC government is unsupported by substantial evidence. Pl.‘s Br. 24.
Here, the Department‘s determination to rely upon the capital verification report was supported by substantial evidence. Because the capital verification report is dated after the articles of association, substantial evidence supports the Department‘s finding that the capital verification report was the most contemporaneous information to the POI on the record.14 Commerce‘s decision to give
B. The Department‘s Determination to Countervail BTIC‘s Purchases of Steel Tube Was Supported by Substantial Evidence and in Accordance with Law
In the Final Determination, Commerce found that BTIC and Tianjin Tianhai received countervailable subsidies through their purchases of steel tube produced by the Affiliated Producer15 (a company found by the Department to be an authority16), which the Affiliated Producer sold to third-party trading companies. See Issues & Dec. Mem. at cmt. 7. The third-party trading companies then resold the steel tube to BTIC and Tianjin Tianhai at, what the Department concluded, was a below-market price. See Issues & Dec. Mem. at V.F., cmt. 7.
The Department used the sales prices from the trading companies to determine the value of the benefit provided to BTIC and Tianjin Tianhai in its less-than-adequate-remuneration calculation. See Issues & Dec. Mem. at emt. 7. In other words, Commerce found a countervailable subsidy even though BTIC and Tianjin Tianhai purchased the steel tube from the unaffiliatеd, third-party trading companies, and not directly from the Affiliated Producer. The Department also determined that any effect on the price that might have resulted from the affiliation between the input producer (i.e., the Affiliated Producer) and BTIC (and Tianjin Tianhai) was not relevant. See Issues & Dec. Mem. at emt. 6. This was because it measured the receipt of the benefit based on the sales made between the unaffiliated, third-party trading companies and BTIC (and Tianjin Tianhai), and not between BTIC (and Tianjin Tianhai) and the affiliated input producer (the Affiliated Producer). See Issues & Dec. Mem. at cmt. 6.
The court holds that the Department‘s determination is supported by substantial evidence and is in accordance with law.
Under the Department‘s construction of the statute, “the two necessary elements of a subsidy—financial contribution and benefit—need not necessarily go to the same person.” Def.‘s Resp. to Pl.‘s Mot. for J. upon the Agency R. 16 (ECF Dkt. No. 35) (“Def.‘s Br.“). Defendant insists that, because the statute is silent as to whether “the ‘person’ who receives the ‘financial contribution’ must be the same as the person who receives the ‘benefit,‘” Commerce‘s construction of the statute must be afforded Chevron deference, and be upheld, because its interpretation is reasonable. Def.‘s Br. 16-17 (citing United States v. Eurodif S. A., 555 U.S. 305, 316 (2009); Chevron, 467 U.S. at 843).
“When reviewing Commerce‘s construction of the trade statute, this Court is directed by the two-step framework set forth by Chevron.” Xiping Opeck Food Co. v. United States, 38 CIT —, —, 34 F. Supp. 3d 1331, 1342 (2014) (citing Fine Furniture (Shanghai) Ltd. v. United States, 748 F.3d 1365, 1369 (Fed. Cir. 2014)); see also Chevron, 467 U.S. at 842-43. The first step requires the court to determine whether Congress‘s intent under the statute is clear. Chevron, 467 U.S. at 842-43. If Congress‘s intent is found to be clear, the court “must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue,” that is, “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency‘s answer is based on a permissible construction of the statute.” Id. (footnote omitted). “Further, under United States v. Mead, Commerce‘s construction of a statute need not be found in a formal regulation adopted after notice-and-comment to receive deference.” Xiping, 38 CIT at —, 34 F. Supp. 3d at 1342 (citing United States v. Mead Corp., 533 U.S. 218, 230-31 (2001)). Its interpretation, however, must be accompanied by some degree of formality. See Mead, 533 U.S. at 227 (“Delegation of such authority may be shown in a variety of ways, as by an agency‘s power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of a comparable con-
Here, the Affiliated Producer, which Commerce found to be an authority, sold its steel tube to independent, third-party trading companies. These companies then subsequently sold the steel tube to BTIC and Tianjin Tianhai. The Department found that, under
As an initial matter, based on the plain language of the statute, Congress‘s intent is unclear as to whether the benefit must be received by the same person that received the financial contribution in order for a subsidy to be present. Thus, the court must determine, under step two of Chevron, whether Commerce‘s construction of the statute—that the benefit need not be conferred upon the same person that receives the financial contribution—is reasonable. See Chevron, 467 U.S. at 843.
First, it is apparent that the unfair trade statute permits Commerce to countervail the transactions at issue here. The statute states that, if the Department “determines that the government of a country or any public entity within the territory of a country is providing, directly or indirectly, a countervailable subsidy with respect to the manufacture, production, or export of a class or kind of merchandise imported . . . into the United States” and the International Trade Commission determines that those imports “materially injure” or threaten a United States industry with material injury, “then there shall be imposed upon such merchandise a countervailing duty, in addition to any other duty
The statute defines a countervailable subsidy as “the case in which an authority . . . provides a financial contribution . . . to a person and a benefit is thereby conferred.”
Moreover, the statute anticipates that the financial contribution need not be direct. Legislative history demonstrates that Congress understood that the Department intended to prevent the circumvention of the statute through the conferral of indirect subsidies. See SAA, H.R. Doc. No. 103-316, at 926, reprinted in 1994 U.S.C.C.A.N. at 4239-40 (“The Administration plans to continue its policy of not permitting the indirect provision of a subsidy to become a loophole when unfairly traded imports enter the United States and injure a U.S. industry. . . . In cases where the government acts through a private party, . . . the Administration intends that the law continue to be administered on a case-by-case basis. . . . It is the Administration‘s view that Article 1.1(a)(1)(iv) of the Subsidies Agreement and [19 U.S.C. § 1677(5)(B)(iii)] encompass indirect subsidy practices like those which Commerce has countervailed in the past, and that these types of indirect subsidies will continue to be countervailable, provided thаt Commerce is satisfied that the standard under [19 U.S.C. § 1677(5)(B)(iii)] has been met.“); see also Countervailing Duties,
Case law, moreover, not only permits the countervailing of the transactions at issue, but has found lawful the methodology Commerce has employed here. This Court, in Guangdong Wireking Housewares & Hardware Co. v. United States, upheld Commerce‘s determination, in which it found purchases of wire rod from privately-owned trading companies that had been produced by state-owned producers (authorities), to be countervailable. Guangdong Wireking Housewares & Hardware Co. v. United States, 37 CIT —, —, 900 F. Supp. 2d 1362, 1379-80 (2013), aff‘d, 745 F.3d 1194 (Fed. Cir. 2014). The Guangdong Court explained that
Further, Commerce‘s determination and the Guangdong Court‘s holding are consistent with the Federal Circuit‘s opinion in Delverde, SrL v. United States, in which a privately-owned producer that had received subsidies from the Italian government, sold assets to another privately-owned producer. See Delverde, SrL v. United States, 202 F.3d 1360, 1362 (Fed. Cir. 2000). There, the Department assumed that a pro rata portion of the subsidy received by the seller “passed through” to the purchaser at the time of the sale. Id. at 1363. The Federal Circuit, however, found Commerce‘s methodology for determining whether a company received a countervailing subsidy to be inconsistent with
Here, the facts supply the “causal nexus” that Delverde and AK Steel demand. It is undisputed that the Affiliatеd Producer (an authority) sold the steel tube and, as shall be seen, provided a financial contribution18 to the trading companies. It is also apparent that BTIC and Tianjin Tianhai bought the same steel tube from the third-party trading company suppliers at less than adequate remuneration. In the absence of prices for the sale of the steel tube from the Affiliated Producer to the third-party trading companies, there is no actual evidence of the amount of the financial contribution, i.e., the size of the below-market discount for the steel tube sold by the Affiliated Producer to the trading companies. This lack of evidence, however, is immaterial to the finding of a subsidy because a subsidy may only be found when a benefit is conferred. See
That a financial contribution was made by the Affiliated Producer to the trading companies when the steel tube was sold by the Affiliated Producer to the third-party trading companies cannot be doubted. The trading companies are in the business of making money. This being the case, the Department could reasonably presume that the trading companies paid no more for the steel tube than the price for which they sold it to BTIC and Tianjin Tianhai. Thus, the Department was reasonable in finding that the Affiliated Producer made a financial contribution to the trading companies based on the below-world-market sales price for the steel tube paid by BTIC and Tianjin Tianhai to the trading company suppliers. Therefore, the necessary nexus between the financial contribution and the benefit conferred is demonstrated by (1) the same product being the subject of both sales and (2) BTIC and Tianjin Tianhai paying less than adequate remuneration for the steel tube. See AK Steel, 192 F.3d at 1372 (citing British Steel, 19 CIT at 270, 879 F. Supp. at 1328).
Additionally, the sales price between the Affiliated Producer and the third-party trading companies is not relevant to Commerce‘s determination. See Issues & Dec. Mem. at cmt. 6 (“[R]ecord evidence shows that the transactions for which we are measuring the benefit conferred were not between BTIC and the affiliated producer.“). Pursuant to the statute, the fact that a financial contribution was made, not its size, is all that Commerce must find. It is the amount of the benefit that must be determined. Indeed, this is the result demanded by Delverde where the Federal Circuit found that the full amount of a subsidy cannot be presumed to be passed from the recipient of the subsidy to the purchaser of the subsidized entity‘s assets. See Delverde, 202 F.3d at 1364.
As to the size of the benefit, as defendant points out, the benefit analysis seeks to determine whether the respondent received something at a price below that available in the marketplace. See Def.‘s Br. 22 (“A benefit analysis, on the other hand, seeks to determine whether the respondent received something on terms more favorable than those available on the market.“). “Commerce measures the adequacy of remuneration by comparing the price paid by a particular respondent to an adjusted benchmark figure representative of the market price for the good at issue.” Essar Steel Ltd. v. United States, 34 CIT —, 721 F. Supp. 2d 1285, 1292 (2010) (citing
The court further finds plaintiff‘s contention that Commerce should have analyzed the transactions in question under the “upstream subsidy” provision of
As to plaintiff‘s argument that Commerce should have analyzed the sales and purchases as “affiliated transactions” under
Accordingly, the court holds that Commerce‘s construction of the statute—that the financial contribution and benefit need not be conferred on the same person—is in accordance with law. In addition, the court holds that Commerce‘s determination—that BTIC‘s and Tianjin Tianhai‘s purchases of the Affiliated Producer‘s steel tube from their third-party trading company suppliers were countervailable—is in accordance with law and supported by substаntial evidence.
III. SELECTION OF A BENCHMARK PRICE FOR STEEL TUBE
A. The Department‘s Averaging Methodology Was in Accordance with Law
As previously noted, in the Preliminary Determination, Commerce found, based on information supplied by the PRC government, that 38 percent of steel tube production in the PRC during the POI was manufactured by government-owned entities. Preliminary Determination,
Following publication of the Preliminary Determination, BTIC submitted additional prices that it argued should be used to calculate the benchmark, including price data from Iran, and diameter-specific
Plaintiff asserts that the Department committed two errors when it chose to average the available steel tube prices from all three countries, rather than selecting the Ukrainian prices. See Pl.‘s Br. 30–33. First, it contends that the Ukrainian steel tube prices were the best information on the record and should have been the sole source selected to calculate the benchmark because they were the only record prices that identified the diameter of the steel tube being used, and those prices matched the diameter range of the steel tube actually purchased by BTIC and Tianjin Tianhai. See Pl.‘s Br. 31–32. BTIC argues that the record demonstrates that there is a significant price variation based on diameter. See Pl.‘s Br. 33. In doing so, it maintains that the 57–159 millimeters “category from the Ukraine is consistently lower each month during the POI than the 168–325 [millimeter Ukraine] category” and also “consistently lower than the [combined prices] from other countries containing all [steel tube] diameter levels.” Pl.‘s Br. 33 (citing Mem. from Christopher Siepmann, International Trade Compliance Analyst, AD/CVD Operations, for Susan Kuhbach, Office Director, AD/CVD Operations at Attach. 3, CD 96 at bar code 3073976-01 (Apr. 30, 2012), ECF Dkt. No. 18 (“Final Calculation Mem.“)).
Second, plaintiff makes the related argument that the Department was not required to use the average of all record benchmark prices for the entire POI and that instead, it should have selected the lowest record price for each month if it was not going to rely upon the Ukrainian prices exclusively. Pl.‘s Br. 35, 37 (“Selecting the lowest market price from any country is the only way to determine whether BTIC and Tianjin Tianhai had purchased [steel tube] at [less than adequate remuneration]. If the Department selected only a single country from the record for all months and thеre were lower prices in another country for a particular month, then the Department would be unreasonably inflating the benefit BTIC received in that month. Or, more simply, the Department would be calculating a benefit when a lower world market price on the record would result in no benefit at all.“). BTIC argues that “the primary goal in determining the most appropriate benchmark is to identify a benchmark that would actually be available to purchasers in” the PRC. Pl.‘s Br. 35. Thus, for BTIC, “when prices from multiple countries are averaged together, across country lines, the resulting constructed price is not one that BTIC and Tianjin Tianhai could have actually obtained. Instead, this cross-country average represents a purely hypothetical constructed price that is not obtainable from any single source.” Pl.‘s Br. 36 (citations omitted). Thus, BTIC contends that Commerce‘s employed methodology ran afoul of
Having taken plaintiff‘s arguments into consideration, the court holds that the Department acted lawfully in averaging the prices available on the record from Ukraine, Italy, and Iran to calculate the benchmark price for steel tube.
As previously discussed, under the countervailing duty stаtute, “[a] benefit shall normally be treated as conferred” by the Department “where goods or services are provided, if such goods or services are provided for less than adequate remuneration.”
In this case, Commerce‘s selection of a tier-two benchmark is not in dispute. Thus, the issue is whether Commerce erred by averaging the prices available from three countries to calculate a benchmark price for steel tube, rather than relying solely on the Ukrainian data, which was, according to BTIC, specific to the steel tube purchased by it and Tianjin Tianhai. First, Commerce‘s calculation of an average of the Italian, Ukrainian, and Iranian prices is consistent with its regulation, which states that, when using a tier-two benchmark that involves “more than one commercially available world market price,” the Department “will average such prices to the extent practicable.”
Next, although Commerce must use benchmark prices for merchandise that is comparable to a respondent‘s purchases to satisfy the regulation, there is nothing that requires that it use prices for merchandise that are identical to a respondent‘s purchases. See Archer Daniels Midland Co. v. United States, 38 CIT —, —, 968 F. Supp. 2d 1269, 1278 (2014) (“Commerce . . . is required only to select benchmarks that are comparable, not identical.” (citing
Moreover, despite plaintiff‘s claims to the contrary, as the Department has explained previously, “[t]here is no basis in the regulations for selecting . . . the lowest monthly world market price in identifying the monthly benchmark . . .” as plaintiff would have the court hold. Galvanized Steel Wire Issues & Dec. Mem. at cmt. 8. Commerce‘s regulation unambiguously directs it to average multiple prices available on the record to determine a world market price as the benchmark. See
Although plaintiff maintains that it would have necessarily obtained the lowest price for steel tube available each month, there is nothing on the record to suggest that this is actually the case. Indeed, that the data from Italy and Iran includes prices for the same diameter of steel tube contained in the Ukraine data, yet the steel tube is being offered for sale, and presumably sold, at different amounts, demonstrates that there are other considerations, in addition to price, that affect the price of steel tube. That is, such factors as quality, delivery time, current availability, reliability of supply, supplier qualification, and product consistency enter into purchasing decisions. See, e.g., Nippon Steel Corp. v. United States, 28 CIT 1738, 1761, 350 F. Supp. 2d 1186, 1206 (2004) (citations omitted), rev‘d on other grounds, 458 F.3d 1345 (Fed. Cir. 2006); Comm. for Fair Coke Trade v. United States, 27 CIT 774, 790 n. 18, 2003 WL 21184073 (2003) (citation omitted); Kern-Liebers USA, Inc. v. United States, 19 CIT 87, 102, 1995 WL 33066 (1995) (citations omitted). Therefore, contrary to plaintiff‘s assertions, purchasing decisions are bаsed on a number of considerations, and are not limited to a product‘s price, and plaintiff‘s argument, that only the lowest prices should be used in constructing the benchmark, is unconvincing.
Finally, plaintiff‘s claim, that averaging the three data sets was impracticable, is also unconvincing. As the Department noted, there was no difficulty to calculating an average of these three prices, which is precisely why it proceeded as it did in the Final Determination by doing so. See Issues & Dec. Mem. at cmt. 8.
Accordingly, the court holds that Commerce‘s construction of a benchmark price
B. Exhaustion of Administrative Remedies
In addition to its objections to the methodology used by Commerce to select a benchmark price for steel tube as discussed above, plaintiff asserts that, if
Defendant, however, observes that BTIC failed to exhaust its administrative remedies with respect to this argument, because it never raised the argument before Commerce in its case brief during the investigation. Def.‘s Br. 37. Nonetheless, plaintiff urges the court to consider its challenge to the validity of
Because the futility exception is inapplicable here, the court will not consider plaintiff‘s argument regarding the validity of the regulation, which it makes here for the first time. A court “shall, where appropriate, require the exhaustion of administrative remedies.”
This case, however, is not a situation where it would have served no purpose for plaintiff to make its argument before Commerce. Whether the Department was unlikely to accept BTIC‘s position does not excuse its failure to present the argument to Commerce. See id. Doing so would have afforded Commerce the opportunity to respond to plaintiff‘s arguments and justify its interpretation of its regulation and the underlying statute, which in turn, would have created a record for the court to review on appeal. Because making its argument would not have been a “useless motion,” the futility exception is unavailable to plaintiff.21 See Xinjiamei, 38 CIT at —, 968 F. Supp. 2d at 1267.
C. The Department‘s Addition of the VAT, Import Duties, and Inland Freight Costs Was in Accordance with Law
In the preliminary and final determinations, Commerce used world market prices available to purchasers in the PRC as a benchmark for steel tube. See Preliminary Determination,
BTIC objects to the addition of the VAT and import duties to the benchmark prices. See Pl.‘s Br. 40. According to plaintiff, the record establishes that BTIC and Tianjin
Plaintiff further contends that “[t]he Department‘s conclusion that BTIC‘s and Tianjin Tianhai‘s individual import experience is irrelevant to the benchmark calculation is contrary to the plain language of the regulation and unsupported by substantial evidence.” Pl.‘s Br. 41. The language of the regulation requires the use of the “delivered” price, and, for plaintiff, this means that the addition of the VAT to the benchmark price for the steel tube is contrary to law. See Pl.‘s Br. 42 (citing
Also, plaintiff objects, as inconsistent, Commerce‘s inclusion of the costs that BTIC and Tianjin Tianhai actually incurred for the delivery of steel tube in the construction of the benchmark price for each company. BTIC claims that “[t]he Department‘s use of a company-specific аdjustment for one component of the benchmark price [ (i.e., inland freight charges)] while refusing to do the same for other components of the benchmark price [(i.e., VAT and import duties)] is arbitrary, capricious and otherwise contrary to law.” Pl.‘s Letter Br. Regarding Inland Freight 1-2 (ECF Dkt. No. 66). In other words, for plaintiff, it is inconsistent for Commerce to use BTIC‘s and Tianjin Tianhai‘s actual experience in constructing one part of the benchmark but ignore it when constructing another part.
The court is unpersuaded by plaintiff‘s claims. Commerce‘s regulations direct it to use “delivered prices” when calculating a benchmark price. See
Pursuant to
Indeed, the Federal Circuit has upheld the Department‘s practice of ignoring a particular respondent‘s сonditions of purchase when calculating tier-two benchmark prices, and found that adding these charges to a benchmark price, even where the respondent did not incur these costs, “is consistent with the relevant statute and regulation.” Essar Steel, 678 F.3d at 1274 (“Both the statute and the regulation, however, require that these costs [ (freight and import costs)] be added to the benchmark prices. Commerce‘s decision to add these charges to the benchmark prices is consistent with the relevant statute and regulation and is supported by substantial evidence.” (citing
Plaintiff does not dispute that other firms would pay these costs. Indeed, “[t]he importation of products necessarily entails payment of certain ‘delivery charges and import duties’ that would not apply when
Further, contrary to plaintiff‘s assertions, the Department acted consistently when adjusting the benchmark prices to include delivery charges. See, e.g., Aluminum Extrusions From the PRC,
Although plaintiff claims that Commerce‘s inclusion of inland freight charges that were specific to BTIC‘s and Tianjin Tianhai‘s purchases оf steel tube was at odds with the Department‘s refusal to use company-specific information for other components of the benchmark price (e.g., VAT and import duties), there is no inconsistency. This is the case even though Commerce did, in fact, determine the amount of inland freight costs using numbers based on BTIC‘s and Tianjin Tianhai‘s actual experience. See Final Calculation Mem. at 59, 64. Here, however, BTIC‘s and Tianjin Tianhai‘s numbers were the only sets of inland freight data placed on the administrative record. Thus, despite its practice of ordinarily declining to rely upon delivery charge data that is specific to a particular respondent when using a tier-two benchmark, because, here, there was no other data available on the record, the Department was left with only the actual price data reported by BTIC and Tianjin Tianhai to calculate the benchmark for steel tube. “The burden of building the administrative record lies with the interested parties.” Jacobi Carbons AB v. United States, 38 CIT —, —, 992 F. Supp. 2d 1360, 1369 (2014) (citing QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011)). Had plaintiff wished to place other evidence of freight costs on the record, it could have done so. Consequently, Commerce‘s selection of BTIC‘s and Tianjin Tianhai‘s inland freight data was reasonable and was not irreconcilable with its decision to decline to make company-specific adjustments for other components of the benchmark price for steel tube.
CONCLUSION
Based on the foregoing, it is hereby
ORDERED that the Department of Commerce‘s Final Dеtermination is sustained. Judgment will be entered accordingly.
EATON, Senior Judge
UNITED STATES SENIOR JUDGE