ASG Industries, Inc. v. United States

610 F.2d 770, 67 C.C.P.A. 11, 1979 CCPA LEXIS 179
CourtCourt of Customs and Patent Appeals
DecidedNovember 29, 1979
DocketC.A.D. 1237; No. 79-15
StatusPublished
Cited by29 cases

This text of 610 F.2d 770 (ASG Industries, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Customs and Patent Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ASG Industries, Inc. v. United States, 610 F.2d 770, 67 C.C.P.A. 11, 1979 CCPA LEXIS 179 (ccpa 1979).

Opinions

Miller, Judge.

This is an appeal from the judgment of the U.S. Customs Court, 82 Cust. Ct.1, C.D. 4782 (1979), which upheld the decision of the Secretary of the Treasury (“Secretary”) that float glass manufactured in West Germany did not benefit from the payment or [14]*14bestowal of a bounty or grant witbin tbe meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303). We reverse and remand.

Background

Appellants, domestic manufacturers and wholesalers of float glass, petitioned the Commissioner of Customs for imposition of a countervailing duty on float glass manufactured in West Germany. They alleged that benefits received by float glass manufacturers in West Germany under various regional development programs, which included low-interest loans and investment subsidies in the form of cash grants and tax credits, were bounties or grants within the countervailing duty law.1

The Treasury Department (“Treasury”) preliminarily determined 2 that imports of float glass from West Germany benefit from the payment or bestowal of a bounty or grant within the meaning of 19 U.S.C. 1303 by reason of the payments made under the regional development programs. After further study based on additional information, Treasury changed its position3 giving the following reasons:

The German Government has advised the Treasury Department that these benefits have the effect of offsetting disadvantages which would discourage industry from moving to and expanding in less prosperous regions. Inasmuch as the recipient glass producers sell a preponderance of their production in the West German home market (not less than 80 percent and up to 99 percent), the level of exports to the United States is a small percentage of the amount exported, and the amount of assistance provided by the regional incentive programs is less than 2 percent of the value of float glass produced, these benefits are not regarded as bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303).

[15]*15Appellants then brought an action in the Customs Court, under 19 U.S.C. 1516(d),4 contesting this negative countervailing duty determination. Both sides moved for summary judgment. Appellants alleged that the payments are countervailable; the Government contended that appellants failed to establish that the alleged bounties or grants possess the requisite eifect upon international trade that is necessary before countervailing duties will be imposed.5

The Customs Court

The Customs Court concluded that, although the statutory language is mandatory (“there shall be levied”), Congress did not intend “that all assistance given by foreign governments” be considered bounties or grants within the statute, but gave authority to the Secretary to determine whether a bounty or grant has been bestowed, citing United States v. Hammond Lead Products, Inc., 58 CCPA 129, C.A.D. 1017, 440 F. 2d 1024, cert. denied, 404 U.S. 1005 (1971). It said that the case law provides two tests to be used in countervailing duty determinations: (1) Whether, as a result of governmental programs, exportation of the involved merchandise is encouraged, citing Downs v. United States, 187 U.S. 496 (1903) (hereinafter “Downs”), and Nicholas & Co. v. United States, 249 U.S. 34 (1919) (hereinafter “Nicholas”); (2) whether the governmental assistance distorts international trade or discriminates against U.S. sales at home and abroad, citing Zenith Radio Corp. v. United States, 437 U.S. 443 (1978), aff'g. United States v. Zenith Radio Corp., 64 CCPA 130, C.A.D. 1195, 562 F. 2d 1209 (1977).6 Because only up to 20 percent of the float glass manufactured by the participants in the regional development programs was sold outside the West German home market, and because the ad valorem size of the assistance provided by these programs was less than 2 percent of the value of the float glass produced, the Customs Court found that, although such assistance was more than de minimis, “the bounties do not appear to have induced the sale of merchandise in such quantities [16]*16or value as would tend to distort international trade.7 [Italic added.] The Customs Court cited trade statistics showing increases in the U.S. production and exports (expecially to West Germany) of float glass, and decreases in importations of West German float glass, for support of the Secretary’s decision to not impose countervailing duties. Having determined that appellants “failed to overcome the presumption of correctness attaching to the action of the Secretary,” 7 the Customs Court denied appellants’ motion and granted the Government’s motion for summary judgment.

OPINION

Essentially, appellants argue that, since the countervailing duty statute is mandatory, once the Secretary has determined that foreign manufacturers are receiving any benefit from their government, a countervailing duty must be imposed. The Government, agreeing with the Customs Court, argues that the legislative history and case law show that Congress intended countervailing duties to be imposed only against those programs and actions of a foreign government that have been shown to distort international trade and that the following factors involved in international trade distortion must be considered in determining the existence of a bounty or grant: (1) The ad valorem size of the benefits; (2) the level of exports from the foreign country of goods receiving the benefits; and (3) whether the benefit programs had a positive effect on these exports,

With respect to the ad valorem size of the benefits, the Government’s concession that the benefits under the regional development programs are not de minimus establishes, prima facie, that this factor is met. The finding by Treasury that up to 20 percent of the goods are exported likewise establishes that the second factor is met.8 As to whether the benefit programs had a positive effect on exports, Treasury’s finding that “the amount of assistance provided by the regional incentive programs is less than 2 percent of the value of float glass produced” does not, without more, overcome a presumption that such benefits had a positive effect, or would have a potentially positive effect, on exports, particularly when compared to the average ad valorem rate of duty of 8.2 percent during the year involved (1974), as pointed out by appellant. See 42 Fed. Reg.

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Bluebook (online)
610 F.2d 770, 67 C.C.P.A. 11, 1979 CCPA LEXIS 179, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asg-industries-inc-v-united-states-ccpa-1979.