Fag Italia S.p.A. v. United States

291 F.3d 806
CourtCourt of Appeals for the Federal Circuit
DecidedMay 24, 2002
DocketNos. 01-1212, 01-1215, 01-1213, 01-1214
StatusPublished
Cited by41 cases

This text of 291 F.3d 806 (Fag Italia S.p.A. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fag Italia S.p.A. v. United States, 291 F.3d 806 (Fed. Cir. 2002).

Opinions

Opinion for the court filed by Circuit Judge DYK, in which Circuit Judge PROST joins. Circuit Judge MICHEL concurs-in-part and dissents-in-part.

DYK, Circuit Judge.

This case presents two issues. First, it involves the question whether the Department of Commerce (“Commerce”) properly defined “foreign like product” for purposes of 19 U.S.C. §§ 1677b(a)(l) and 1677b(e). In SKF USA Inc. v. United States, 263 F.3d 1369 (Fed.Cir.2001), we vacated the Court of International Trade’s decision on that identical issue and remanded for Commerce to explain why it uses a different definition of “foreign like product” for price-based calculations for normal value than it does for calculations of constructed value. The parties agree that SKF USA governs here, and that we should likewise remand this case to Commerce for further consideration of that issue. Accordingly, we will not discuss the “foreign like product” issue further in this opinion. We vacate the decision of the Court of International Trade on this issue and remand for further proceedings consistent with our opinion in SKF USA

Second, this case involves the question whether Commerce can properly conduct a duty absorption inquiry pursuant to 19 U.S.C. § 1675(a)(4) for “transition orders”1 in 1996 and 1998, the second and fourth years after the deemed issuance date of transition orders under section 1675(c)(6)(D). We hold that Commerce’s action in conducting such inquiries is not authorized by the statute and affirm the judgment of the Court of International Trade in this respect. The opinion that follows addresses that issue.2

Statutory Background

The antidumping statute is designed to prevent foreign goods from being sold at [809]*809unfairly low prices in the United States to the injury of United States producers. Antidumping orders are issued as a result of a process that involves both Commerce and the ITC.

Commerce decides whether dumping exists by determining whether foreign merchandise has been sold or is likely to be sold in the United States at “less than its fair value.” 19 U.S.C. § 1673(1) (2000). Commerce first makes a preliminary determination whether there is a reasonable indication that foreign merchandise is being sold at less than fair value, 19 U.S.C. § 1673b(b)(l)(A) (2000), then establishes dumping margin3 rates reflecting that amount. 19 U.S.C. §§ 1678d(a)(l), 1673d(c)(l)(B) (2000). The ITC determines whether a domestic industry is “materially injured” or is “threatened with material injury,” or whether “the establishment of an industry in the United States is materially retarded” by dumping. 19 U.S.C. § 1673d(b)(l) (2000). If the determinations of Commerce and ITC are both affirmative, Commerce issues an anti-dumping order assessing duties on the foreign exporter. 19 U.S.C. § 1673d(c)(2) (2000).

Before the amendments to the anti-dumping statute under the Uruguay Round Agreements Act (“URAA”), Pub.L. No. 103-465, 108 Stat. 4809 (1994), the only statutorily authorized review of anti-dumping orders after they were issued was Commerce’s annual administrative review, in which Commerce reviewed the amount of antidumping duty, and recalculated the dumping margin as necessary to reflect actual competitive conditions. 19 U.S.C. § 1675(a)(1) (1988). These annual reviews were continued in the URAA amendments. See 19 U.S.C. § 1675(a)(1) (2000). Under the URAA amendments, Congress additionally: (1) authorized Commerce to conduct so-called duty absorption inquiries in conjunction with its second and fourth annual administrative reviews of antidumping orders, upon request by an interested domestic party; and (2) provided for a completely new kind of review of antidumping duty orders: sunset reviews, to be jointly conducted by ITC and Commerce five years after the issuance of an order. Sunset reviews eliminate needless antidumping orders by terminating orders after five years, unless ITC and Commerce both determine that revocation of the orders would lead to recurrence of dumping and material injury. Subsection (a) of section 1675 governs duty absorption inquiries. Subsection (c) governs sunset reviews.

Duty Absorption

The purpose of a duty absorption inquiry is to ensure that foreign exporters identified by Commerce as dumping goods in the United States do not undermine the purpose of the antidumping laws by “absorbing” the duty rather than passing the duty on to United States purchasers in the form of higher prices. In such circumstances, dumping continues despite the assessment of the duty, and, as a result, “the remedial effect of an antidumping order may be undermined.... ” Joint Report of the Committee on Finance, Committee on Agriculture, Nutrition, and Forestry, Committee on Governmental Affairs of the United States Senate to accompany S. £¿67, S.Rep. No. 103-412, at 44 (1994).

Congress provided that:

During any [annual] review ... initiated 2 years or 4 years after the publication [810]*810of an antidumping duty order, [Commerce], if requested, shall determine whether antidumping duties have been absorbed by a foreign producer or exporter subject to the order if the subject merchandise is sold in the United States through an importer who is affiliated with such foreign producer or exporter.

19 U.S.C. § 1675(a)(4) (2000).4 Section 1675(a)(4) further provides that Commerce “shall notify the [ITC] of its findings regarding such duty absorption for the [ITC] to consider in conducting a [sunset review].”

The consequence of a finding of duty absorption by Commerce is that the anti-dumping order is less likely to be revoked as a result of a sunset review. The Statement of Administrative Action recognized that “[d]uty absorption may indicate that the [foreign] producer or exporter would be able to market more aggressively should the order be revoked as a result of a sunset review.” Uruguay Round Agreements Act: Statement of Administrative Action (“SAA ”), H.R. Doc. No. 103-316, at 886 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4211. It was further understood:

Duty absorption is a strong indicator that the current dumping margins calculated by Commerce in reviews may not be indicative of the margins that would exist in the absence of an order. Once an order is revoked, the importer could achieve the same pre-revocation return on its sales by lowering its prices in the U.S.

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Bluebook (online)
291 F.3d 806, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fag-italia-spa-v-united-states-cafc-2002.