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Upcoming Programs
18th Judicial Conference of the United States Court of International Trade

DECEMBER 1, 2014

8:30am - 5:30pm

The New York Palace

455 Madison Avenue

New York, New York 10022

 

Please refer to the Court's announcements below for additional information. 

Conference Details 

 

 

International Trade Update

FEBRUARY 26-27, 2015

Georgetown University Law Center, Hart Auditorium

600 New Jersey Ave NW, Washington, D.C. 20001

 

The International Trade Update will give you practical, topical, and timely information that you can use back at your desk - whether you are a private practitioner, government attorney, or in-house counsel.

Update Details

 

 

Past CITBA Events
Reception to Welcome the New Chief Judges of the Federal Circuit and the Court of International Trade
  
SEPTEMBER 11, 2014
Court of Appeals for the Federal Circuit
Dolley Madison House, 1520 H Street, NW
Washington, DC 20005
  
Members of the Bench and Bar met for an informal discussion and wine and beer reception. This event, co-sponsored by CITBA and the International Trade Committee of the Federal Circuit Bar Association, included brief remarks by Chief Judge Sharon Prost of the Court of Appeals for the Federal Circuit, Chief Judge Timothy C. Stanceu of the Court of International Trade.

 

 


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Annoucements

 

NEWS FROM THE CLERK OF THE COURT OF INTERNATIONAL TRADE
 
By Tina Potuto Kimble, Scott Warner & Stephen Swindell*

The Judicial Conference is Coming! The Judicial Conference is Coming!

The Court of International has announced its 18th Judicial Conference to be held on December 1, 2014. It will be held at the New York Palace in the heart of Manhattan. For those of you familiar with New York City, this venue was formerly known as the Helmsley Palace - it has been completely refurbished and is a truly spectacular setting for our conference. It is an all-day event with plenty of CLE available (including the ever coveted ethics credits). 

  

The planning committee, under the excellent leadership of John McInerney, Chief Counsel for Trade Enforcement and Compliance in the Department of Commerce's International Trade Administration, has developed an extremely engaging program. As suggested by the conference title, "Who's on the Hook (And Who Can Afford the Hook Anyway?)", the planning committee has attempted to keep a very practical focus in all the panels. The topics consider how private parties interact with government agencies, how government agencies interact with each other, and how all that affects litigation at the CIT. Other topics to be explored are piercing the corporate veil after Trek Leather as well as how to make litigation cheaper and faster, especially in an era of resource constraints. Of course, the judges of the Court will also be participating throughout the program and in the very popular judges speak to the bar panel at the end of the day.

 

We hope to see you at the conference on December 1. You can register on the Court's website at http://www.cit.uscourts.gov/Judicial_Conferences/18th_Judicial_Conference/18th_Jud_Conf_Index.htm. And, please be sure to submit questions for the judges' panel as part of your registration.

 

* Tina Potuto Kimble is the Clerk of the Court. Stephen Swindell is the Supervisor and Scott Warner is the Operations Manager for Case Management at the Court of International Trade.


 
Feature Article 

 

By Andrew Hudson*


 

The Australian FTA Adventure Continues with the Release of the Text of the Korean and Japanese Trade Agreements

Introduction and the Political Background

In the second half of 2013, there was a change in the political composition of the Australian Federal Government with control moving from the Australian Labor Party to the Coalition comprised by the Liberal and National Parties. To put this in a United States context, it largely represented a shift from a Democratic to Republican Congress. However, at the moment, the Coalition only controls the lower house of Parliament (the House of Representatives) but not the upper house (the Senate) where the Coalition will need the support of other Senators, whether from smaller political parties or from a number of "independent" Senators to have legislation passed.

Coalition Differences on Trade Policy

The situation becomes even more complicated when it is considered that the Coalition parties do not share identical positions on trade matters. The Liberal Party tends to favor more open trade subject to traditional concerns on levels of investment in certain strategic industries where majority Australian control is felt to be preferable. On the other side, the National Party has traditionally been perceived as supporting the agricultural sector which has had the consequence in Trade matters of supporting improved export markets for agricultural producers but resisting reductions in tariffs on imported foods and seeking restrictions on direct foreign investment in the agricultural sector or in agricultural land. These differences play out in the context of debate as to levels and areas of investment which need review by the Australian Foreign Investment Review Board (FIRB) and the role of the Federal Treasurer who often has the ultimate decision on whether proposed investments are in the "National Interest" to be approved. Many foreign investors and nations have often complained that the entire process lacks transparency and consistency. Given that Australia has few substantive barriers to overseas trade, the issue of foreign investment and restriction on that investment takes on a significant level of importance.

The importance of foreign investment is currently playing out in negotiations on the proposed FTA with the PRC where there is concern on large - scale PRC investment, especially by State Owned Enterprises.

These differences within the Coalition have played out in other ways. The role of Trade Minister is currently occupied by Andrew Robb (a member of the Liberal Party) although the role had traditionally been held by a member of the National Party. This has caused some tension with the members of the National Party which manifested itself with the Agriculture Minister (Barnaby Joyce) a member of the National Party being openly critical of the terms of the Japan Australia Economic Partnership Agreement (JAEPA) on its signing by Prime Ministers Abbott and Abe on 8 July 2014 in Canberra. The criticisms focused on its perceived failures to deliver more immediate benefits for Australian agricultural exporters - criticisms which were also expressed at the time of announcement of the terms of the Korea Australia Free Trade Agreement (KAFTA).

Agricultural Sensitivities

The sensitivities of the agricultural sector (both for Australia and its trading partners) play out in the KAFTA and the JAEPA in a number of ways. By way of examples

  • Even though levels of foreign investment in Australia without the need for FIRB review have generally been increased in both Agreements, subject to a reservation in relation to agricultural investment where the threshold before the need for review remains relatively low.
  • Many of the concessions for Australian agricultural products by way of reductions in quotas in the KAFTA only operate on a seasonal basis.
  • The JAEPA includes a specific Chapter addressing the trade in "essential food" aimed at ensuring continued supply and to limit restrictions and prohibitions.
Neither the KAFTA nor the JAEPA have conferred many market improvements for the Australian rice growing industry, due to perceived cultural sensitivities of those trading partners.   The Australian rice industry is hoping that the proposed FTA with the PRC will deliver the big benefits.

 

Similarities in Trade Policies

At the same time, all political parties have taken similar positions on some Trade issues

  • They have all expressed objections to the inclusion of Investor State Dispute Resolution (ISDS) mechanisms in FTA on the basis that it compromised national sovereignty. This was the firm position of the former Labor Government and may have formed an impediment to the completion of a number of Free Trade Agreements (FTA). That position has shifted somewhat by the current Coalition Government although it is directly in opposition to the position of US interests that such provisions must be included.
  • They have all supported "toughening" the Australian Trade Remedies regime covering anti-dumping and subsidies. The former Government undertook a massive review and reform of the system and included a series of reforms all of which were expressed to assist Australian Industry in making applications and prosecuting claims. This has included the establishment of the new Anti-Dumping Commission and a new Anti-Dumping Review Panel together with the movement of the administration of the regime from the Australian Customs and Border Protection Service to the Department of Industry. There are stories of even further "tightening" which are reportedly to include a "reversal of onus" which would provide that once a prima facie case of dumping or subsidy has been established it is up to the exporters and importers to disprove the alleged dumping or subsidy. An earlier attempt to introduce such a provision was defeated in Parliament as that version was deemed to be inconsistent to the WTO Agreements. We await to see the revised version.

The General Approach to Dealing on an FTA

The current Government has also relaxed the formal position of the former Government which dictated a "purer" form of comprehensive FTA and adopted a more pragmatic approach which has been consistent to its "open for business" mantra and its assurances that the FTA with Korea, Japan and the PRC would all be in place by the end of 2014 being 12 months from taking office. However that more pragmatic approach has led to criticism from other trading partners - in particular from the US where the view has been expressed that the Australian approach has compromised negotiations on the Trans Pacific Partnership (TPP) by allowing too low a base to Japan and others to join any trade agreements.

Accordingly, even though the adoption of FTA does not formally require the approval of the Federal Parliament (more on that later), the political background to the KAFTA and the JAEPA (and potentially an FTA with the PRC has created its own specific problems for Australia - especially in light of other trade negotiations and being the host of the G20 for 2014, which places a premium on advances in trade.

 

The Other Australian Trade Agenda

Putting to one side the KAFTA and JAEPA (just for the moment - we'll be back soon), it is worth identifying the countries with which Australia has various FTA

  • NZ
  • Singapore
  • US
  • Malaysia
  • Chile
  • Thailand
  • ASEAN countries (in conjunction with NZ)
  • PACER (the Pacific Islands)

As you will note, there are a number of ASEAN countries with which Australia has bilateral FTA. In those cases, parties have the option of choosing either the ASEAN or bilateral FTA for specific transactions but not a combination of both

In addition to the completed FTA, Australia is negotiating on a number of other bilateral or regional FTA. This includes the seemingly permanent negotiations with the PRC and the potential regional FTA in the forms of the TPP, the Regional Comprehensive Economic Partnership (RCEP), and the revised Pacific Agreement on Closer Economic Relations. The proposed deal with the Gulf Co -Operations Council (GCC) is "on hold" and Australia is at the very early stages of advancing discussions with Indonesia and India on different types of trade agreements, neither of which is expected to deliver outcomes in the near future.

At the same time as advancing its own agenda, Australia has somehow managed engaged with the WTO agenda include endeavouring to advance the WTO Doha Round, becoming a party to the WTO Trade Facilitation Agreement ), leading negotiations on the WTO Trade in Service Agreement and considering entry into the WTO Government Procurement Agreement (among others).

All in all, Australia has a broad engagement with the rest of the world on various trade agreements which represents both Australia's need for improved trade opportunities and the need to pursue agreements which ensure that it is not "left behind" against the efforts of its main trade competitors.


 

Summary - Outcomes from Both the KAFTA and the JAEPA

Both the KAFTA and the JAEPA include similar architecture as to Chapters, Schedules and Annexes and provisions regarding rules of origin and certificates of origin. However, there are a number of areas of specific interest.

  • In a sense, both FTA can be considered as having aspirational characteristics. While there are a number of demonstrable immediate benefits, many of the benefits to Australian exporters phase in over a number of years. Again this demonstrates a pragmatic approach to FTA which may not be popular with some industries or commentators but reflects the bargaining positions of the parties and the desire of the Australian Government to get a deal in place given the moves by other trading competitors.
  • Both the JAEPA and the KAFTA include some flexibility in terms of requirements for importers and exporters to hold documents evidencing that goods are entitled to preferential treatment. Both agreements allow for exporters to elect to either hold Certificates of Origin issued by an authorized party or to provide their own Exporter Declaration. There are also provisions enabling exporters who are not the producer to provide such verification and even for importers to do so on occasion.
  • There is no ISDS in the JAEPA on the basis that both countries are deemed to have mature legal systems. However the absence of such a provision does call into question the views on the Korean legal system as there is an ISDS in the KAFTA so far as it relates to foreign investment
  • Both the JAEPA and the KAFTA include State to State dispute resolution provisions subject to specific areas such as Technical Barriers to Trade, Sanitary and Phystosanitary Measures, Competition Policy and some aspects on Movement of Natural Persons
  • In a manner consistent with the perceived political agenda, while both the KAFTA and the JAEPA have increased the threshold for investment before the FIRB must give approval that is subject to specific exemptions in areas considered to be particularly sensitive. This sort of selective approach to investment approval may well form the basis for similar arrangements under the FTA with the PRC - where I would not expect the inclusion of an ISDS
  • Services remains possibly the hardest area to secure significant immediate gains. Despite this, Australia's services sector continues to perform strongly outstripping all other exports.
  • The JAEPA includes 2 Chapters which address specific areas of interest in trade between Australia and Japan, namely Chapter 7 (Food Supply) and Chapter 8 (Energy and Mineral Resources). Both Chapters reflect concerns to ensure that trade in these items is maintained and well regulated so as to reduce the prospects of interruption in these areas which are vital to both countries.
  • The JAEPA does not include Chapters on Labor and Environment as are in the KAFTA. While both Japan and Australia are parties to various international agreements on these topics, the absence of these provisions in the JAEPA raises the perennial question as to whether these topics actually have a place in FTA.

Approval for Both the KAFTA and the JAEPA

In the Australian context, the first step after "in principle" agreement on an FTA, is that it is subject to formal legal review and translation, then signature and only then subject to Parliamentary review. In the Australian context this does not require passage and approval by both Houses of Parliament but it is laid before the Joint Standing Committee of Treaties (JSCOT) and occasionally review by a separate Senate Committee (as is the case with the KAFTA). While this has never rejected an Agreement out of hand, the review by JSCOT affords aggrieved parties with the right to object to Agreements, which has been the case with KAFTA - and in a recent example JSCOT did not immediately approve the adoption of the Anti - Counterfieting Agreement so the Federal Government is seeking to secure support for the KAFTA, as it will do for the JAEPA which it is introduced.

The FTA will then be subject to domestic legislation to implement its provisions (for example, introducing specific provisions for rules of origin and certificates of origin and reductions in rates of duty). Once both parties have passed the domestic legislation then they will exchange Diplomatic Notes and the FTA will start 30 days later. In the case of the KAFTA this may be early January 2015 with the JAEPA sometime later.

The Potential Effect on an FTA with the PRC

There may be an impact on the PRC FTA negotiations in particular - the willingness to agree to a less comprehensive agreement on the KAFTA and the JAEPA may give some indicators as to where the Australian Government may be prepared to give ground. As a result we may see an agreement with the FTA with PRC relatively shortly with provisions not unlike those of the KAFTA and JAEPA in terms of sectoral specific deals, allowance of increased PRC investment (including by PRC State Owned Enterprises) and no ISDS. It may also not deliver immediate improvements in trade in lieu of longer - term concessions from the PRC. Doubtlessly this will infuriate certain sectors of the Australian economy but will be viewed more broadly as at least a starting point with a significant trade participant who has been an elusive FTA partner for many years.

*Andrew Hudson is a Partner in the Corporate Advisory & Tax team at Gadens in Melbourne, specializing in International Trade & Customs. 

 

Federal Circuit and CIT Case Summaries

 By Claudia Burke & Stephen Tosini*

Federal Circuit Affirms Anti-Dumping Determination Concerning Fresh Garlic from China.  Qingdao Sea-line Trading Co., Ltd. v. United States (Fed. Cir.) [Newman, Reyna, Chen, JJ].  On September 10, 2014, the Federal Circuit sustained the Department of Commerce's calculation of antidumping duties on certain imports of fresh garlic from China.  Sales of products in non-market economies, such as China, may not reflect the fair value of the products.  Commerce thus calculates a "surrogate value" for non-market economy merchandise based on the value of similar merchandise in a market economy at the level of economic development comparable to that of the subject non-market country, e.g., India.  The Federal Circuit, applying a de novo standard of review, affirmed the Court of International Trade judgment sustaining Commerce's determination of the:  (1) surrogate value for garlic bulb; and (2) surrogate financial ratios that Commerce uses to value general, selling, and administrative expenses, overhead, and profit.  The court also confirmed that the interested parties, not Commerce, have the burden to create an adequate record.

On En Banc Rehearing, Federal Circuit Rejects Argument that only Importers of Record Can Be Liable for Negligent Violations of 19 U.S.C. � 1592 and Affirms Lower Court Judgment against President of Importer. United States v. Trek Leather, Inc. (Fed. Cir.) [en banc, Taranto, J.]. On September 16, 2014, the Federal Circuit, in an en banc rehearing, affirmed the Court of International Trade's judgment against Harish Shadadpuri (the president of Trek) that was based on Mr. Shadadpuri's gross negligence in connection with Trek's importations of men's suits. On appeal, Mr. Shadadpuri contended that only "importers of record" (and authorized agents) were subject to liability for negligent violations of 19 U.S.C. � 1592. A divided panel had previously accepted Mr. Shadadpuri's argument and reversed the trial court's judgment in a decision that was later vacated. In affirming the underlying judgment, the en banc court: (1) interpreted section 1592 as imposing liability upon "any person" (and not only importers of record); (2) recognized that Mr. Shadadpuri was a "person"; and (3) concluded that, because the undisputed facts established that Mr. Shadadpuri had himself "introduced" the merchandise by means of material false statements and omissions, Mr. Shadadpuri was liable for violating section 1592 without regard to his status as a corporate officer.

Court of Appeals for the Federal Circuit Sustains Commerce Antidumping Duty Determination that Dumping Duties Should Be Assessed Based on the Amount of Dumping by Exporters, not Manufacturers. Michael's Stores, Inc. v. United States (Fed. Cir.) [Prost, C.J., Clevenger, Chen, JJ]. On September 10, 2014, the Federal Circuit affirmed the judgment of the Court of International Trade, holding that Commerce had permissibly construed its antidumping duty regulations to require each Chinese pencil exporter to obtain a separate antidumping duty rate different from the rate assessed on the manufacturer's own exports. The government contended that imposition of the manufacturer's rate of duty could create a loophole, through which state-controlled exporters could dump goods in the United States without scrutiny. The court agreed, reasoning that Commerce's practice was necessary to prevent circumvention.
  

Court of International Trade Holds that Commerce Not Bound by a Regulation that the Agency Withdrew Without Prior Notice and Comment Because the Plaintiff Failed to Show Prejudice. Beijing Tianhai Indus. Co. v. United States (Ct. Int'l Trade) [Eaton, J.]. On September 9, 2014, the Court of International Trade held that Commerce was not required to apply 19 C.F.R. � 351.414(f) (2007), which the agency had withdrawn in 2007 without prior notice and comment based on the good cause exception, because any violation of the Administrative Procedure Act (APA) constituted harmless error. Beijing Tianhai Industries. Co. (BTIC), a Chinese producer and exporter of high pressure steel pipe products, had argued that Commerce violated the APA and was required to apply the withdrawn regulation, which would have limited the agency's discretion to apply a statutory comparison methodology (known as the average-to-transaction or A-to-T method) to all of BTIC's sales for the purpose of detecting targeted dumping (within groups of customers, regions, or periods of time). The court held that APA principles of harmless error required BTIC to demonstrate that it was prejudiced by its inability to comment before withdrawal of the regulation. Because BTIC had 30 days to submit comments after Commerce issued the withdrawal notice (and never did so), the court held that any violation of the APA was harmless as to BTIC.

Court of International Trade Dismisses Importer's Challenge to CBP Imposition of Duties. Carbon Activated Corp. v. United States (Ct. Int'l Trade) [Carman, J.]. On September 9, 2014, the Court of International Trade granted the government's motion to dismiss plaintiff's action challenging U.S. Customs and Border Protection's (CBP) 2008 assessment of duties. Plaintiff contended that the assessment was premature and unlawful because of a pending judicial challenge by another importer. The government sought dismissal for lack of jurisdiction because, based on the congressionally-mandated process, plaintiff could have protested CBP's assessment within 180 days and, had it failed to prevail in such protest, it could then have challenged CBP's denial by filing a challenge within two years pursuant to 28 U.S.C. � 1581(a). The court rejected plaintiff's arguments to the contrary, holding that "[p]laintiff's failure to pursue that remedy in a timely manner does not fall under the rubric of 'manifestly inadequate' and therefore [p]laintiff cannot invoke [28 U.S.C. � 1581(i)] jurisdiction in this case."  

 

Court of International Trade Sustains Commerce's Imposition of Adverse Facts Available on German Paper Producer. Papierfabrik August Koehler SE v. United States [Tsoucalas, S.J.] On September 3, 2014, the Court of International Trade sustained in full Commerce's determination to apply an adverse antidumping duty rate resulting in the imposition of over $100 million in duties to a German paper producer that had been caught engaging in a scheme to avoid the antidumping duty order on thermal paper from Germany. The scheme involved the German producer "transshipping" sales to its German customers through third countries to mask the fact that the sales were to the company's home market and to avoid reporting them to Commerce. The court held that Commerce lawfully applied an increased dumping rate using "Adverse Facts Available" (AFA) based on the company's failure to cooperate by concealing the sales until its scheme was discovered, and that Commerce had sufficiently corroborated the 75.36 percent AFA rate as consistent with the company's commercial reality. 

 

Court of International Trade Sustains the Department of Labor's Negative Determination in a Trade Adjustment Assistance Case. Former Employees of The Boeing Company, Boeing Defense and Space Division, Wichita, Kansas v. Department of Labor (Ct. Int'l Trade) (Carman, J.). On August 11, 2014, the Court of International Trade sustained the Department of Labor's (Labor) determination that plaintiffs, former employees of the Boeing Defense and Space Division, who were engaged in the defense-related maintenance and modification of military aircraft at Boeing's Wichita facility, were ineligible to apply for Trade Adjustment Assistance (TAA) benefits under the Trade Act of 1974. The benefits available under the TAA program are designed to facilitate the reemployment of U.S. workers who have lost their jobs or may lose their jobs due to the effects of international trade. Plaintiffs contended that a remand was necessary because, among other reasons, Labor failed to conduct an adequate investigation to support its finding that the services at issue were governed by the International Traffic in Arms Regulations (ITAR), promulgated pursuant to the Arms Export Control Act, which require that such services may only be carried out within the United States. The court held that substantial evidence supported findings that: (1) there had not been an overseas shift in the defense-related maintenance and modification services because these services were covered by ITAR and, as such, were required to be carried out within the United States; and (2) Boeing had transferred the services being provided at Boeing's Wichita facility to other domestic facilities based on a business decision unrelated to a shift in services to a foreign country. 

Federal Circuit Affirms the Award of Lost Duties and Interest Based upon a Novel Cause of Action in a Suit Brought against a Carrier for Missing Merchandise. United States v. C.H. Robinson Co. (Fed. Cir.) [O'Malley, Reyna, Wallach, JJ.]. On July 28, 2014, the Federal Circuit affirmed the Court of International Trade's judgment holding a carrier who was transporting wearing apparel from China, entered through the United States, to Mexico, liable for duties, taxes, and fees pursuant to 19 U.S.C. � 1553, and 19 C.F.R. � 18.8(c), because the merchandise went missing in transit. Although most actions for lost duties are filed pursuant to 19 U.S.C. � 1592, which requires the government to demonstrate fraud, gross negligence, or negligence in entering or introducing merchandise into the United States, 19 C.F.R. � 18.8(c) merely requires the government to demonstrate that the merchandise at issue is missing. On appeal, the Federal Circuit held that although the carrier had produced properly receipted Customs forms as proof of delivery, such forms were not conclusive, and a preponderance of the evidence supported the trial court's finding that the merchandise was missing. 

 

Court of International Trade Sustains Commerce's Antidumping Determination Regarding Chinese Copper. Cerro Flow Products, LLC, et al. v. United States (Ct. Int'l Trade) [Restani, J.]. On July 18, 2014, the Court of International Trade sustained Commerce's final results in an annual administrative review of the antidumping order on copper pipe from China. The domestic copper pipe industry contended that Commerce's decision not to make a certain adjustment to its central calculation unreasonably favored Chinese copper producers. The court disagreed and sustained Commerce's decision as reasonable, also holding that Commerce's different decision in a prior review was irrelevant. The court further rejected assertions that Commerce should have applied AFA to the foreign importer, holding that, although Commerce's explanation of its determination "was not presented perfectly," the agency's reasoning was reasonably discernable and an appropriate exercise of discretion.

 

Court of International Trade Sustains Department of Commerce Targeted Dumping Methodology. JBF RAK LLC v. United States (Ct. Int'l Trade) [Barzilay, S.J.]. On July 1, 2014, the Court of International Trade sustained Commerce's final results in the administrative review of its antidumping order covering PET film from the United Arab Emirates. JFB, a foreign producer, contended that Commerce had unlawfully applied its "targeted dumping" methodology outside of the original investigation, that it had improperly applied the methodology even if lawfully applied in the administrative review, that Commerce had also improperly applied its "model match" methodology, and that Commerce had improperly issued liquidation instructions 15 days after publishing its final results, to give CBP sufficient time to act. The court rejected each of the challenges, holding further that JBF had failed to establish that it was prejudiced by Commerce's consideration of the domestic industry's allegedly untimely allegation of targeted dumping. Although the court exercised jurisdiction to entertain the 15-day claim over the government's objection, it held that JBF had failed to present the challenge in a manner that would be susceptible to judicial review.

Federal Circuit Reverses Department of Commerce's Scope Ruling Regarding Magnesium Carbon Bricks Imported from China and Mexico. Fedmet Resources Corp. v. United States (Fed. Cir.) [Reyna & Rader, JJ.; Wallach, J., dissenting]. On June 20, 2014, a divided panel of the Federal Circuit reversed and remanded the Court of International Trade's judgment sustaining Commerce's ruling that Fedmet's imports of magnesia-alumina-carbon (MAC) bricks, which are used in the steelmaking industry, fall within the scope of Commerce's antidumping and countervailing duty orders covering certain magnesium carbon bricks (MCBs) from China and Mexico. Fedmet contended that Commerce's scope ruling was unsupported by substantial evidence because the record in the underlying investigations before Commerce and the International Trade

Commission established that MAC bricks had been excluded from the scope of the investigation, and that Commerce had adopted scope language proposed by petitioner, which intended to exclude MAC bricks. The Federal Circuit agreed with Fedmet, holding that: (1) the record established that petitioner had disclaimed coverage of all MAC bricks; and (2) Commerce understood that the investigation did not extend to MAC bricks. In dissent, Judge Wallach asserted that the majority had failed to base its analysis on the plain language of the orders, opting instead to focus on the domestic producer's petition, which is contrary to the governing regulations.

Court of International Trade Sustains Commerce's Determination in Antidumping Duty Review of Activated Carbon from China. Jacobi Carbons AB, et al. v. United States (Ct. Int'l Trade) [Eaton, J.]. On June 24, 2014, the Court of International Trade sustained Commerce's final results in the fourth administrative review of the antidumping duty order on certain activated carbon from China. In proceedings involving non-market economy countries such as China, Commerce selects a comparable market-based country from which to select "surrogate value" information to value factors of production for calculations required to ultimately determine the applicable duties; generally, Commerce considers sales and financial information from non-market economies to be unreliable. Among other challenges, plaintiffs, who are producers, exporters, or importers of Chinese activated carbon, challenged Commerce's selection of surrogate values for certain inputs used to produce activated carbon, contending that Commerce's selection of Philippines import data was unsupported by substantial evidence. The court rejected those contentions, holding Commerce's choice of surrogate values in accordance with law and supported by substantial evidence.

Court of International Trade Holds that Commerce Not Required to Investigate the Reasons for a Pattern of Export Sales Prices before Applying "Targeted Dumping" Methodology. Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. United States (Ct. Int'l Trade) [Barzilay, S.J.]. On June 25, 2014, the Court of International Trade sustained Commerce's interpretation of 19 U.S.C. � 1677f-1(d)(1)(B), which authorizes the agency to utilize an alternative methodology for calculating dumping margins when certain statutory criteria are met. Borusan, a producer and exporter of steel pipe products from Turkey, contended that the statute required Commerce to consider whether there were legitimate commercial reasons for its pricing behavior before using the alternative methodology, which is designed to remedy targeted dumping (within groups of customers, regions, or periods of time) that might be masked by the application of the statutorily preferred methodology. The court rejected Borusan's argument, holding that neither 19 U.S.C. � 1677f-1(d)(1)(B), nor the legislative history, required Commerce to undertake an investigation or to conduct an analysis concerning the reasons behind Borusan's pricing behavior.

*Claudia Burke and Stephen Tosini are attorneys with the Department of Justice, Civil Division, National Courts Section. These summaries are not a document of the U.S. Department of Justice, nor does it represent the official views of the Department of Justice.

 

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