Apex Exports v. United States , 777 F.3d 1373 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
APEX EXPORTS, AND
FALCON MARINE EXPORTS LIMITED,
Plaintiffs-Appellees,
v.
UNITED STATES,
Defendant-Appellee,
AND
AD HOC SHRIMP TRADE ACTION COMMITTEE,
Defendant-Appellant,
AND
AMERICAN SHRIMP PROCESSORS
ASSOCIATION,
Defendant.
______________________
2014-1234
______________________
Appeal from the United States Court of International
Trade in Nos. 1:11-cv-00291-RWG and 1:11-cv-00286-
RWG, Senior Judge Richard W. Goldberg.
______________________
Decided: February 5, 2015
______________________
2 APEX EXPORTS v. US
LIZBETH R. LEVINSON, Kutak Rock LLP, of Washing-
ton, DC, argued for plaintiff-appellees. With her on the
brief was RONALD M. WISLA.
JOSHUA E. KURLAND, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were STUART F. DELERY,
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and PATRICIA M. MCCARTHY, Assistant Director. Of
counsel on the brief was SCOTT D. MCBRIDE, Senior Attor-
ney, Office of the Chief Counsel for Trade Enforcement &
Compliance, United States Department of Commerce, of
Washington, DC.
DAVID A. YOCIS, Picard Kentz & Rowe LLP, of Wash-
ington, DC, argued for defendant-appellant. With him on
the brief were ANDREW W. KENTZ, JORDAN C. KAHN, and
NATHANIEL MAANDIG RICKARD.
______________________
Before NEWMAN, CLEVENGER, and DYK, Circuit Judges.
CLEVENGER, Circuit Judge.
Ad Hoc Shrimp Trade Action Committee appeals the
final decision of the Court of International Trade (“CIT”),
sustaining the refusal by the Department of Commerce
(“Commerce”) to deduct antidumping duties when calcu-
lating an export price. Apex Exports v. United States, No.
11-00291, 2013 WL 6978901 (Ct. Int’l Trade Dec. 31,
2013). This court has jurisdiction under 28 U.S.C.
§ 1295(a)(5) (2012). Because Commerce’s interpretation of
the antidumping statute is reasonable, we affirm.
I
Commerce is responsible for imposing antidumping
duties. These duties are levied when foreign merchandise
is sold in the United States at less than fair value and
APEX EXPORTS v. US 3
such sales pose a threat to domestic industry. 19 U.S.C.
§ 1673 (2012). Commerce calculates the antidumping duty
using the export price methodology. See Certain Frozen
Warmwater Shrimp from India, 76 Fed. Reg. 12025,
12028 (Mar. 4, 2011) (prelim. admin. review, partial
rescission, and prelim. determination). Under this meth-
od, Commerce determines whether subject merchandise is
being sold at less than fair value. If it is, Commerce
determines how much less, and then assesses antidump-
ing duties to make up the difference. 19 U.S.C. § 1673.
For this calculation, Commerce first determines the
“export price” (“EP”). This is the price that the first unaf-
filiated U.S. buyer pays for the subject merchandise. 19
U.S.C. § 1677a(a) (2012). Then, Commerce calculates the
“normal value” (“NV”). This is treated as the fair value,
and it is the price at which the subject merchandise is
sold in the exporting country. 19 U.S.C. § 1677b(a)(1)(B)(i)
(2012). If EP is lower than NV, and it poses a threat to
U.S. industry, then Commerce assesses a duty “equal to
the amount by which the normal value exceeds the export
price.” 19 U.S.C. § 1673. In practice, Commerce sets the
duty by determining the dumping margin. A weighted
average dumping margin is the difference between NV
and EP, then divided by EP ((NV − EP)/EP). 19 U.S.C.
§ 1677(35) (2012).
However, it is not quite that simple. The goal of this
calculation is to allow Commerce to compare the fair
value of the merchandise to the price charged in the U.S.
Therefore, both EP and NV are subject to adjustments, so
that they closely reflect the price of subject merchandise
at a common point in the chain of commerce. 19 U.S.C.
§ 1677b(a)(1)(B); 19 U.S.C. § 1677a(c)(2); 19 U.S.C.
§ 1677b(a)(6). As it pertains to this appeal, EP is reduced
by the cost of bringing merchandise to the U.S.
4 APEX EXPORTS v. US
Specifically,
[t]he price used to establish export price . . . shall
be . . . reduced by . . . the amount, if any, included
in such price, attributable to any additional costs,
charges, or expenses, and United States import
duties, which are incident to bringing the subject
merchandise from the original place of shipment
in the exporting country to the place of delivery in
the United States . . . .
19 U.S.C. § 1677a(c)(2). This includes, for example, freight
expenses, U.S. customs duties, and port charges. Id.; 76
Fed. Reg. at 12028. Because these are costs incident to
bringing all merchandise into the U.S., one would expect
U.S. prices to be higher to account for those expenses.
Those price increases do not have a bearing on the fair
value of merchandise. Therefore, the statute instructs
Commerce to deduct them from EP. NV is subject to
similar adjustments. 19 U.S.C. § 1677b(a)(6). The overall
goal is to arrange an apples-to-apples comparison between
the domestic and foreign price of merchandise. Then
Commerce can correct for dumping by imposing an addi-
tional duty.
II
In 2005, Commerce made a final determination that
certain shrimp imported from India were likely being sold
in the U.S. at less than fair market value. Certain Frozen
Warmwater Shrimp from India, 70 Fed. Reg. 5147 (Feb. 1,
2005) (notice of amended final determination). During the
fifth administrative review of that antidumping order,
shrimp exporters Apex Exports (“Apex”) and Falcon
Marine Exports Limited (“Falcon”) were selected as
individual respondents. Commerce assessed a 2.31% and
1.36% dumping margin for Apex and Falcon, respectively.
Certain Frozen Warmwater Shrimp from India, 76 Fed.
Reg. 41203, 41205 (July 13, 2011) (final admin. review,
partial rescission, and final determination).
APEX EXPORTS v. US 5
Commerce calculated the EP of merchandise sold by
Apex and Falcon during the period of this fifth adminis-
trative review. Commerce started with the packed price of
the shrimp charged to the first unaffiliated purchaser in
the U.S. 76 Fed. Reg. at 12028. Then, in accordance with
19 U.S.C. § 1677a(c)(2)(A), Commerce deducted certain
expenses from that price to reach EP.
Commerce deducted the following costs from Apex’s
price to determine EP:
foreign inland freight expenses, export inspection
agency (EIA) fees, foreign brokerage and handling
expenses, various foreign miscellaneous shipment
charges, international freight expenses, terminal
handling charges, marine insurance expenses,
U.S. customs duties (including harbor mainte-
nance fees and merchandise processing fees), U.S.
brokerage and handling expenses, and U.S. inland
freight expenses . . . .
76 Fed. Reg. at 12028.
Commerce deducted the following costs from Falcon’s
price to calculate EP:
cold storage expenses, loading and unloading ex-
penses, trailer hire expenses, foreign inland
freight expenses, port charges, export survey
charges, terminal handling charges, foreign bro-
kerage and handling expenses, international
freight expenses, marine insurance expenses, U.S.
customs duties (including harbor maintenance
fees and merchandise processing fees), and U.S.
brokerage and handling expenses . . . .
Id.
Neither Apex nor Falcon made sufficient sales in their
home market—India—during the period of review to
allow a proper comparison with U.S. sales. Therefore, to
6 APEX EXPORTS v. US
determine NV, Commerce looked at other comparison
markets. For Apex, Commerce selected the United King-
dom, and for Falcon, Commerce selected Japan as the
comparison market. Id. The companies sold similar prod-
ucts at similar volumes in those countries, as compared to
U.S. sales. Id. (citing 19 U.S.C. § 1677b(a)(1)(C); 19 C.F.R.
§ 351.404). Commerce made adjustments to the prices
charged in those comparator countries to calculate NV, so
that it could compare NV and EP at the same level of
trade. 76 Fed. Reg. at 12028.
As it pertains to this appeal, there is one important
difference between the sales to the United Kingdom and
Japan, as compared to sales in the U.S. Both Apex and
Falcon ship merchandise to the United Kingdom and
Japan on a cost and freight (“C&F”) basis. This means
that the seller only covers the costs necessary to deliver
merchandise to the named port of destination. Apex
Exports, 2013 WL 6978901, at *7 n.6. In contrast, Apex
and Falcon ship merchandise to the U.S. on a delivery-
duty-paid (“DDP”) basis, such that they act as both the
exporters and importers of record for the merchandise.
Under such a contract, the exporter is also responsible for
paying the costs associated with importation. That in-
cludes paying import and export duties and complying
with customs formalities. Id. at *7 n.7.
Apex and Falcon brought suit in the CIT, challenging
the dumping margins assigned to them as excessive
because of an alleged error by Commerce in calculating
the normal value of their exports. The CIT rejected their
claim, and they do not appeal. Ad Hoc Shrimp Trade
Action Committee (“Ad Hoc”), an intervenor-defendant
association of domestic shrimp producers which partici-
pated in the administrative proceeding, also challenged
the dumping margins in the CIT. Ad Hoc argued that the
EP of the merchandise sold by Apex and Falcon should be
recalculated by the deduction of the amount of antidump-
ing duties assessed on their exports and paid by Apex and
APEX EXPORTS v. US 7
Falcon. Such a deduction would have the effect of increas-
ing the dumping margins.
III
Ad Hoc’s challenge in the CIT was based on its plain
language reading of the relevant statute, which provides
that, when calculating EP, Commerce shall deduct “the
amount . . . attributable to any additional costs, charges,
or expenses, and United States import duties, which are
incident to [importation].” 19 U.S.C. § 1677a(c)(2). Ad Hoc
argued that antidumping duties assessed on imports are
necessarily “additional costs, charges, or expenses” asso-
ciated with importation, where, as in this case, the ex-
porter is responsible for payment of the antidumping
duties. Thus, Ad Hoc argued that the words of the statute
are unambiguously clear, requiring deduction of anti-
dumping duties in the calculation of EP, and denying
Commerce any authority to refuse to make such deduc-
tions.
Ad Hoc’s arguments to the CIT did not sound in a
vacuum. Two precedents, one from the CIT and one from
this court, stood in its way. In Wheatland Tube Co. v.
United States, 495 F.3d 1355 (Fed. Cir. 2007), this court
addressed under 19 U.S.C. § 1677a(c)(2) whether anti-
dumping duties fell within the meaning of “United States
import duties,” in a fact setting where Commerce had
refused to deduct § 201 safeguard duties when calculating
EP. 1 We held that “Congress has not defined or explained
1 Section 201 of the Trade Act of 1974 authorizes
the President to impose safeguard duties if merchandise
is imported to the U.S. in such large quantities that it
injures domestic industry. Wheatland Tube, 495 F.3d at
1357. Both antidumping and § 201 safeguard duties are
remedial duties, in contrast to normal customs duties that
serve no remedial purpose. Id. at 1362. This court con-
8 APEX EXPORTS v. US
the meaning or scope of ‘United States import duties’ as
set forth in 19 U.S.C. § 1677a(c)(2), [and] [t]hus, because
Congress has not ‘directly spoken to the precise question
at issue,’ this court finds that the statute is ambiguous
and proceeds to step two of Chevron.” Id. at 1359–60. We
further upheld Commerce’s interpretation of the statute,
which refused deduction of safeguard duties when compu-
ting EP, as reasonable. Id. at 1361.
In the light of Wheatland Tube, Ad Hoc did not argue
that antidumping duties were included in “United States
import duties” under the statute, and instead argued that
under the same statute antidumping duties must be
considered “additional costs, charges, or expenses.” Here,
Ad Hoc ran up against Ad Hoc Shrimp Trade Action
Committee v. United States, 925 F. Supp. 2d 1367 (Ct.
Int’l Trade 2013), in which it made the same statutory
argument it presents in this case. The opinion in that
case, relied upon by the CIT in the instant case, concluded
that the statute does not speak directly to the question of
whether antidumping duties must be considered “addi-
tional costs, charges, or expenses” under the statute. Id.
at 1367. In that situation, the statute’s ambiguity invoked
the familiar Chevron step two inquiry, which asks wheth-
er Commerce’s long-standing interpretation of the statute
is reasonable. The CIT deemed Commerce’s interpretation
reasonable and thus worthy of deference. Id. at 1372.
Not surprisingly, the CIT in this case concluded that
the statute does not define “costs, charges, or expenses”
incident to importing merchandise. Apex Exports, 2013
WL 6978901, at *6 (citing Wheatland Tube Co. v. United
States, 495 F.3d 1355, 1359–60 (Fed. Cir. 2007)). There-
fore, the CIT considered whether Commerce’s approach to
cluded it was reasonable for Commerce to treat antidump-
ing and § 201 safeguard duties similarly for the purposes
of 19 U.S.C. § 1677a. Id.
APEX EXPORTS v. US 9
calculating EP was based on a reasonable construction of
the statute. Id. (citing Chevron U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837, 843 (1984)).
The CIT concluded that Commerce’s construction of
the statute was reasonable. Apex Exports, 2013 WL
6978901, at *6. For one, the CIT determined Commerce’s
approach works as intended to bring NV and EP into
alignment. Id. Moreover, if Commerce deducted anti-
dumping duties as Ad Hoc suggested, importers such as
Apex and Falcon “would pay more in duties than the
antidumping statute intends.” Id. at *7. The CIT found
that Ad Hoc’s proposed approach to calculating EP would
lead to circular calculations and double counting of the
antidumping margins. Id. Therefore, the CIT concluded it
was reasonable for Commerce to apply the statute to
avoid that result. Id.
IV
On appeal, Ad Hoc again argues that the plain mean-
ing of the statute governs, and Commerce must deduct
antidumping duties when it calculates EP where those
duties are included in the price of the merchandise.
Alternatively, Ad Hoc argues that Commerce’s interpreta-
tion of the statute is unreasonable, and thus not entitled
to deference. Ad Hoc emphasizes that Apex and Falcon
sell shrimp in the U.S. on a DDP basis. Under these
agreements, Apex and Falcon expressly agree to cover
antidumping duties. Therefore, Ad Hoc argues, the price
on those contracts includes the antidumping duty, and it
should be deducted from EP as a cost incident to bringing
merchandise to the U.S. We disagree.
A
This Court reapplies the standard of review applied
by the CIT when reviewing Commerce’s final determina-
tions. Dupont Teijin Films USA, LP v. United States, 407
F.3d 1211, 1215 (Fed. Cir. 2005). “Commerce’s determina-
10 APEX EXPORTS v. US
tion should therefore be upheld unless it is unsupported
by substantial evidence on the record or is not in accord-
ance with law.” Id. (citing 19 U.S.C. § 1516a(b)(1)(B)(i)
(2012); Micron Tech. Inc. v. United States, 117 F.3d 1386,
1393 (Fed. Cir. 1997)). Regarding Commerce’s statutory
interpretations, we apply the two-part framework laid out
in Chevron. Union Steel v. United States, 713 F.3d 1101,
1106–07 (Fed. Cir. 2013) (citing Chevron U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837, 842–43
(1984)).
B
The first step in the Chevron analysis asks if the stat-
ute in question is ambiguous. If not, the statute speaks for
itself in its plain language, and the interpretation spring-
ing from the unambiguous language governs. Where the
statute is ambiguous, the second step asks if the interpre-
tation proffered by the government is reasonable. If so, it
is entitled to deference and is applied as a matter of law.
Whether a statute is ambiguous can be ascertained in
different ways. The Supreme Court instructs that ambi-
guity resides where Congress has not “directly addressed
the precise question at issue.” Chevron, 467 U.S. at 843. If
the language of a statute suggests that Congress may
have directly addressed the issue at hand, but nonethe-
less has not done so to produce an “unambiguously ex-
pressed intent of Congress,” id., the statute cannot be said
to be unambiguous. By either test, 19 U.S.C. §1677a(c)(2)
is ambiguous on the question of whether antidumping
duties must be deemed “additional costs, charges, or
expenses” for purposes of calculating EP.
Congress did not address the specific question before
this Court. The statute does not define “any additional
costs, charges, or expenses.” Moreover, nothing in the
statute or legislative history instructs Commerce whether
to deduct antidumping duties from EP as such a cost,
charge, or expense.
APEX EXPORTS v. US 11
This Court previously held that “Congress has not de-
fined or explained the meaning or scope of ‘United States
import duties’ as set forth in 19 U.S.C. § 1677a(c)(2)(A).”
Wheatland Tube Co. v. United States, 495 F.3d 1355, 1359
(Fed. Cir. 2007). We agree that Congress was similarly
silent on the precise definition of § 1677a(c)(2)(A)’s “any
additional costs, charges, or expenses”—and specifically
silent as to whether antidumping duties fall within that
definition.
Viewed the other way, the statute is equally ambigu-
ous. Ad Hoc insists that Congress unambiguously meant
what it said: namely, that “any” cost, charge or expense it
pays to get the shrimp to the United States must under
the explicit words of the statute be deducted in computing
EP. But Ad Hoc’s view overlooks that we have held that
Congress intended to exclude antidumping duties from
the calculation of EP, when such duties were labeled as
“United States import duties.” Ad Hoc’s position depends
on its implicit assertion that what Congress intended for
antidumping duties when associated with terms most
closely describing them (import duties) is exactly the
opposite of what Congress meant for antidumping duties,
when associated with the more general description of
“cost[], charge[], or expense[].” Further, Ad Hoc assumes
that Congress meant for antidumping duties necessarily
to be costs, charges or expenses “incident to bringing the
subject merchandise from the original place of ship-
ment . . . to the place of delivery in the United States.”
The statute is not so clear, and leaves for question wheth-
er antidumping duties are instead incident to pricing
decisions made by the exporter, and not costs related
solely to importation. Ad Hoc cannot overcome these
questions, which stand in the way of any assertion that
Congress unambiguously stated that antidumping duties
must be deducted from the computation of EP.
12 APEX EXPORTS v. US
C
Because the statute is ambiguous, we turn to the sec-
ond step of the Chevron analysis, and consider “whether
the agency’s answer is based on a permissible construc-
tion of the statute.” Chevron, 467 U.S. at 843. Since it is
reasonable, consistent with the goals of the statute, and
reflects Commerce’s long-standing practice, we conclude
Commerce’s refusal to deduct antidumping duties from
EP is entitled to deference.
Commerce considers antidumping duties as distinct
from normal selling expenses and customs duties. Normal
customs duties have no remedial purpose. Wheatland
Tube, 495 F.3d at 1362. Antidumping duties, on the other
hand, are special duties that implement a trade remedy.
See Stainless Steel Wire Rod from the Republic of Korea,
69 Fed. Reg. 19153, 19159 (Apr. 12, 2004) (final admin.
review). As the CIT has described it, antidumping duties
are “an element of a fair and reasonable price,” not an
import duty or cost associated with importation. Hoogov-
ens Staal BV v. United States, 4 F. Supp. 2d 1213, 1220
(Ct. Int’l Trade 1998). Furthermore, legislative history
signals that antidumping duties are special remedial
duties, distinct from U.S. import duties. See, e.g., S. Rep.
No. 67-16, at 4, 10–11 (1921); Wheatland Tube, 495 F.3d
at 1361. It is therefore reasonable for Commerce not to
treat antidumping duties as costs of importation when
calculating EP.
The statute in question instructs Commerce to make
two reductions when calculating EP: (1) subtract the
amount attributable to U.S. import duties and (2) sub-
tract the amount attributable to additional costs, charges,
or expenses incident to importation. 19 U.S.C.
§ 1677a(c)(2)(A). Since antidumping duties are not de-
ducted from EP as “United States import duties,” it is
reasonable for Commerce to likewise refuse to deduct
antidumping duties as “costs, charges, or expenses . . .
APEX EXPORTS v. US 13
incident to bringing the subject merchandise” to the U.S.
See § 1677a(c)(2)(A). It is strange to suggest otherwise—
that antidumping duties are not U.S. import duties, but
instead costs incident to importation that must therefore
be deducted from EP. It is reasonable for Commerce to
avoid such a construction of the statute.
What is more, Commerce declines to deduct anti-
dumping margins when calculating the margins because
that would be inappropriately circular and result in a
double counting of the remedy. 2 In arguing otherwise, Ad
Hoc misses the point of the antidumping statute. The goal
of imposing the duty is to prevent dumping by effectively
raising the price of subject merchandise in the U.S. to the
2 Before the CIT and in their briefs to this Court,
both parties offer elaborate hypothetical calculations
about the effect that deducting antidumping duties would
have on calculating the margin. Commerce, Apex, and
Falcon explain that Ad Hoc’s proposed approach would
eventually result in an EP of zero. During the first calcu-
lation, Commerce would take NV minus EP. The result
would be a first antidumping margin (“AD-1”). Then, Ad
Hoc’s approach would require Commerce to go back and
recalculate EP minus AD-1. This would render EP-2, and
require another margin calculation of NV minus EP-2.
This calculation would render another, higher antidump-
ing margin, AD-2. There is no mathematical reason why
the calculation should end there. The new antidumping
margin would feed in to a third iteration of the calcula-
tion, and so on until the antidumping margin was equal to
NV. We agree that Commerce could approach this sort of
calculation without necessarily creating absurd results, as
it does with the reimbursement circumstance mentioned
later in this opinion. However, the cyclical nature of the
underlying calculation highlights a flaw in Ad Hoc’s
proposal.
14 APEX EXPORTS v. US
fair value. The importer has less incentive to charge an
unfairly low price, because it will have to make up the
difference through a duty payment.
The principle underlying the proposed additional
[antidumping] duty . . . is to add such an amount
of duty as will equalize sales at less than the for-
eign home market value . . . , thereby making it
unprofitable to dump goods on the markets of the
United States at lower prices. If the seller of the
goods is compelled to add as duty the difference
between the sales price and what he would receive
by selling in the otherwise highest obtainable
market, all reward or inducement to dumping is
removed.
H.R. Rep. No. 67-1, at 23 (1921). By raising the price for
sales made on a DDP basis, to cover the risk of antidump-
ing duties, Apex and Falcon would likely do just that—
charge U.S. buyers more. This achieves the goal of the
statute, and because the price already reflects an anti-
dumping charge (in the form of a higher DDP price),
following Ad Hoc’s suggestion would in fact result in
double counting that amount.
Finally, as the CIT noted, Commerce’s current posi-
tion is consistent with its longstanding practice of treat-
ing antidumping duties as special, and not deducting
them to calculate EP. Apex Exports, 2013 WL 6978901, at
*8; see also Wheatland Tube, 495 F.3d at 1362–63; Ad Hoc
Shrimp Trade Action Comm. v. United States, 925 F.
Supp. 2d 1367, 1373 n.19 (Ct. Int’l Trade 2013) (referring
to “Commerce’s practice of not reducing export price by
the amount of antidumping deposits paid”); Stainless
Steel Wire Rod from the Republic of Korea, 69 Fed. Reg. at
19159 n.23 (final admin. review) (listing cases where the
CIT agreed that Commerce need not deduct antidumping
duties when calculating for export price). We conclude
that Commerce’s refusal to deduct antidumping duties
APEX EXPORTS v. US 15
when calculating EP reflects a permissible construction of
19 U.S.C. § 1677a(c)(2)(A).
We reject Ad Hoc’s contention that Commerce’s inter-
pretation is unreasonable. Ad Hoc largely argues that
Commerce’s approach does not constitute a fair compari-
son between NV and EP—rehashing similar arguments
made as to statutory construction. Ad Hoc suggests that
Commerce is not making an apples-to-apples comparison
when calculating antidumping margins. Regarding the
question of double counting, and Commerce’s refusal to
deduct antidumping margins from EP because that would
duplicate the remedy, Ad Hoc counters that there is no
evidence double counting would occur. However, as we
have already explained, exporters would likely increase
the price of subject merchandise in DDP contracts to cover
the risk of antidumping duties. Commerce’s interpreta-
tion, and approach to calculating EP, are reasonable and
achieve the goals of the statute.
D
Ad Hoc makes an additional argument, citing Com-
merce’s so-called “reimbursement regulation.” 19 C.F.R.
§ 351.402(f). Ad Hoc does not contend that the reim-
bursement regulation applies in this case. Instead, it
argues that since the regulation requires deduction of
antidumping duties in some cases, Commerce must also
allow those deductions in this case.
The reimbursement regulation provides that Com-
merce will deduct antidumping duties from EP in one
circumstance—when an exporter or producer agrees to
either pay antidumping duties “directly on behalf of [an]
importer” or reimburses an importer for the expense. Id.
The regulation contemplates a foreign exporter or produc-
er that sells merchandise to another entity, and it is that
entity which is responsible for importing merchandise
into the U.S. When an exporter or producer pays the
antidumping duties on behalf of the importer, it triggers
16 APEX EXPORTS v. US
§ 351.402(f). In that circumstance, Commerce will deduct
the duty amount the exporter pays directly or reimburses
when calculating export price, effectively treating the
payment as a price rebate. Id.
Ad Hoc argues that “[b]y asserting that assessed anti-
dumping duties will be deducted from export price if the
exporter pays them on behalf of the importer, but not if
the exporter acts as the importer of record and pays them
on behalf of the U.S. buyer, Commerce elevates form over
substance and treats economically identical situations
differently.” However, we agree with the CIT that just
because Commerce deducts reimbursed antidumping
duties under this regulation, that does not mean it is
unreasonable for Commerce to decline to deduct anti-
dumping duties in other circumstances. Apex Exports,
2013 WL 6978901, at *9.
The rationale behind the reimbursement regulation is
reasonable. Where the antidumping duty is paid by the
exporter, the importer acquires merchandise in the U.S.
at less than a fair price, thus frustrating the purposes of
the antidumping law. By assuming the cost of the anti-
dumping duties—either through direct payment or reim-
bursement—the exporter effectively reduces the U.S.
price. See Hoogovens Staal BV v. United States, 4 F. Supp.
2d 1213, 1217 (Ct. Int’l Trade 1998); Color Television
Receivers from the Republic of Korea, 61 Fed. Reg. 4408,
4410 (Feb. 6, 1996) (final admin. review) (describing the
purpose behind the reimbursement regulation).
The reimbursement regulation at § 351.402(f) is de-
signed to “ensure that the . . . incentive for importers to
buy at non-dumped prices is not negated by exporters
who . . . remov[e] the importer’s exposure to antidumping
liability.” Ad Hoc Shrimp Trade Action Comm. v. United
States, 925 F. Supp. 2d 1367, 1375 (Ct. Int’l Trade 2013).
The regulation creates an added disincentive for the
exporter. If the exporter pays or reimburses for antidump-
APEX EXPORTS v. US 17
ing duties, Commerce will basically double count the
antidumping margin. Id. at 1376; see also Hoogovens
Staal BV, 4 F. Supp. 2d at 1217 (“Presumably, an export-
er will be reluctant to continue paying the cost of anti-
dumping duties because the margin will increase . . . each
time Commerce reviews it.”). The rationale of the reim-
bursement regulation, to discourage exporters from
reimbursing antidumping duties, is reasonable.
On the other hand, Commerce’s general approach of
refusing to deduct antidumping duties addresses a mirror
image situation. Where the importer has to pay anti-
dumping duties itself, the standard disincentive operates
to protect domestic producers because the U.S. price
increases. Commerce refuses to double count the duty
where it is already being paid by the importer. As above,
we conclude that Commerce’s approach is reasonable.
For the purposes of the present case, it is better to
view Apex and Falcon through their role as importers.
Here, both companies are paying antidumping duties as
an importer. These duties, in turn, discourage them from
charging a harmfully low price to U.S. buyers. There is no
need to impose dumping remedies twice—the rationale of
the reimbursement regulation does not apply here.
Ad Hoc suggests that Commerce has no grounds to
distinguish the facts of this case from the reimbursement
context. That is incorrect. Ad Hoc’s argument focuses on
comparing the position of Apex and Falcon to that of
reimbursing exporters. As importers, Apex and Falcon
face the risk of antidumping duties just like every other
importer. Because the reimbursement regulation address-
es a different factual situation and is designed to serve a
distinct purpose, this case is easily distinguished from the
fact setting in which the reimbursement regulation ap-
plies.
18 APEX EXPORTS v. US
CONCLUSION
Because Commerce’s interpretation of the antidump-
ing statute is a permissible construction, the CIT’s deci-
sion to sustain Commerce’s refusal to deduct antidumping
duties when calculating export price is affirmed.
AFFIRMED
No costs.