Prodotti Alimentari Meridionali, S.R.L. v. United States , 26 Ct. Int'l Trade 749 ( 2002 )

Slip Op. 02-68
UNITED STATES COURT OF INTERNATIONAL TRADE
__________
______________________________
:
PRODOTTI ALIMENTARI :
MERIDIONALI, S.R.L., :
:
Plaintiff, :
:
v. : Court No. 01-00020
: Public Version
UNITED STATES, :
:
Defendant, :
:
____________________________ :
[ITA’s antidumping duty determination remanded.]
Dated: July 16, 2002
Riggle and Craven (David J. Craven) for plaintiff.
Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director, Velta A.
Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Matthew P. Reed), Michelle D. Lynch, Office of Chief
Counsel for Import Administration, United States Department of Commerce, of counsel,
for defendant.
OPINION
RESTANI, Judge:
This matter is before the court on Plaintiff’s motion for judgment on the agency record
pursuant to USCIT Rule 56.2. Plaintiff Prodotti Alimentari Meridionali, S.r.l. (“Prodotti”), a
respondent in the antidumping review, challenges certain affirmative determinations made by the
CONSOL. COURT NO . 01-00020 PAGE 2
Department of Commerce (“Department” or “Commerce”) upon a sunset review. See Certain
Pasta from Italy: Final Results of Antidumping Administrative Review, 65 Fed. Reg. 77,852(Dep’t Comm. 2000) (“Final Results”). Prodotti primarily challenges Commerce’s constructed
value methodology arguing that the level of trade adjustment and cost of production analyses
were flawed. In addition, Prodotti challenges Commerce’s decision to conduct verification.
Prodotti also claims that Commerce did not timely release its calculations and that the
calculations released were incomplete
JURISDICTION & STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994). The court will uphold
Commerce’s determinations in antidumping investigations unless they are “unsupported by
substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. §
1516a(b)(1)(B)(i).
BACKGROUND
On May 12, 1995, three U.S. pasta producers (“petitioners”)1 filed a petition with
Commerce alleging that imports of certain pasta from Italy were being, or were likely to be, sold
in the United States at less than fair value (LTFV). See Initiation of Antidumping Duty
Investigations: Certain Pasta From Italy and Turkey, 60 Fed. Reg. 30268-01 (Dep’t Comm.
1995). Commerce investigated and, on June 3, 1996, issued a final affirmative determination.
See Notice of Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy, 61
Fed. Reg. 30326-01 (Dep’t Comm. 1996). On July 24, 1996, Commerce published the
corresponding antidumping duty order. See Notice of Antidumping Duty Order and Amended
1
The petitioners were Borden, Inc., Hershey Foods Corp., and Gooch Foods, Inc.
CONSOL. COURT NO . 01-00020 PAGE 3
Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy, 61 Fed. Reg.
38547 (Dep’t Comm. 1996).
On July 15, 1999, Commerce published notice of the “Opportunity to Request an
Administrative Review” of the initial antidumping order. See Antidumping or Countervailing
Duty Orders, Finding, or Suspended Investigation, 64 Fed. Reg. 38181 (Dep’t Comm. 1999). In
accordance with 19 C.F.R. § 351.213(b)(2), several producers and/or exporters of pasta from
Italy requested an administrative review of their sales, including Prodotti. On August 30, 1999,
Commerce initiated the sunset review at issue here. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 64 Fed. Reg.
47167 (Dep’t Comm. 1999). The period of review (“POR”) was July 1, 1998, through June 30,
1999, and the imports covered by the review include non-egg dry pasta in packages of five
pounds or less. See id.Commerce issued questionnaires to all subject importers on August 30, 1999.2 Prodotti
submitted responses to all sections except Section D, the section regarding its Cost of Production
(“COP”), by October 29, 1999. See Notice of Preliminary Results and Partial Recission of
Antidumping Duty Administrative Review and Intent To Revoke Antidumping Duty Order in
Part:Certain Pasta From Italy, 65 Fed. Reg. 48467, 48468 (Dep’t Comm. 2000). On November
12, 1999, petitioners alleged that Prodotti made sales below the COP during the POR. Pursuant
to 19 U.S.C. § 1677b(b)(2)(A)(ii), Commerce initiated its below-COP investigation. Prodotti did
not submit its initial Section D response until January 3, 2000. Preliminary Results, 64 Fed. Reg
2
Section A of the questionnaire sought general information relating to a party’s
corporate structure, and sales of the subject merchandise. Section B and C of the questionnaire
required comparison listings of home market and U.S. market sales. Section D related
specifically to COP and constructed value of the subject merchandise.
CONSOL. COURT NO . 01-00020 PAGE 4
at 48468. Prodotti’s final response to the COP section of the questionnaire was not submitted
until April of 2000.3
On or about December 8, 1999, Petitioners requested that Commerce conduct
verification of any exporter which had not been subject to verification in the previous two
reviews.4 On or about January 5, 2000, Commerce notified Prodotti that it intended to conduct
verification. Prodotti objected on January 6, 2000. Id. Commerce subsequently issued a
memorandum listing the respondents, including Prodotti, selected for sales verification. On May
3, 2000, Commerce issued verification procedures for Prodotti. Verification of Prodotti’s sales
data was conducted from May 15, 2000 to May 19, 2000.
On July 31, 2000, Commerce notified Prodotti of its affirmative finding in the
Preliminary Results and transmitted a copy of the preliminary analysis memorandum to Prodotti,
including Commerce’s calculation methodology and a copy of the computer program used to
calculate the antidumping margin. On August 8, 2000, Commerce published its preliminary
affirmative antidumping duty determination. See Preliminary Results, 65 Fed. Reg. at 48468.
On August 9, 2000, Prodotti requested Commerce’s analysis methodology and calculations as
well as computer printouts. Commerce responded by letter stating that it already provided the
3
Between January 21 and April 18, 2000, there were several communications between
Commerce and Prodotti discussing the questions in Section D and Prodotti’s responses. On
January 21, 2000, Commerce requested clarification of Prodotti’s section D response. On
February 3, 2000, Prodotti requested clarification of section D. On February 9, 2000, the parties
held a teleconference to discuss revision of Prodotti’s Section D response. On February 24,
2000, Prodotti submitted its supplemental response to Section D. On April 3, 2000, Commerce
requested clarification of the response. On April 18, 2000, Prodotti submitted its second
supplemental response to Section D.
4
Prodotti objected to petitioner’s request arguing that the request was untimely and did
not set forth the identities of parties for whom such verification was requested.
CONSOL. COURT NO . 01-00020 PAGE 5
sufficient data but, as a “courtesy,” provided additional printouts.
On December 13, 2000, Commerce published its Final Results. On appeal, Prodotti
challenges numerous aspects of the Final Results.
DISCUSSION
A. Burden of Proof
The majority of Prodotti’s claims challenge the methodology underlying specific
determinations without alleging that any flaws adversely affected Plaintiff. In the context of a
challenge to an affirmative antidumping determination, it usually is apparent when plaintiffs
would be adversely affected by agency error, but in some cases the purpose of the challenge is
unclear and the plaintiff/respondent must present a viable claim that the alleged errors in the
agency’s methodology likely resulted in a higher antidumping margin.
In other contexts, in unfair trade and customs matters, plaintiffs have been required to
make a prima facie showing that they were likely prejudiced by agency error. See, e.g., Belton
Indus., Inc. v. United States, 6 F.3d 756, 761 (Fed. Cir. 1993) (requiring showing of prejudice
from Commerce’s non-compliance with countervailing duty notice provision); Cummins Engine
Co., 83 F.Supp.2d 1366, 1378 (Ct. Int’l Trade 1999) (no showing of prejudice due to procedural
error as to NAFTA origin verification). While plaintiffs in antidumping duty cases cannot be
required to reconstruct all of the agency’s calculations, where prejudice is an issue, a plaintiff, at
minimum, must explain how it likely would benefit from a particular claimed revision. To allow
otherwise would cause undue delay in the enforcement of agency determinations by encouraging
plaintiffs to assert broad claims challenging any and all determinations, regardless of whether the
alleged error actually affected the margin at issue.
CONSOL. COURT NO . 01-00020 PAGE 6
B. Currency Conversion
Prodotti first argues that the Final Results are flawed because Commerce conducted
unnecessary currency conversions in constructing the U.S. price of Prodotti’s product. To
calculate the dumping margin, Commerce calculates the difference between the Normal Value
(“NV”) of the product and its export price (“EP”) or constructed export price. 19 U.S.C. §
1675(a)(i). To make a fair comparison, 19 U.S.C. §1677b-1 requires that the prices and costs of
products under review be converted to U.S. dollars.5
Prodotti records all transactions in lira. In its Preliminary Determination, Commerce
presumed that, because all of the transactions were recorded in lira, Prodotti had transacted all
sales in lira. Commerce, therefore, converted all sales to dollars pursuant to §1677b-1.
Commerce was later notified by Prodotti that a small number of sales were originally transacted
in dollars but converted to and recorded in lira by Prodotti for internal accounting purposes.
Once Commerce identified those limited sales originally made in dollars, Commerce reversed its
conversions back to lira – that is, back to Prodotti’s original figures. Commerce then converted
the lira to dollars using the same exchange rate originally applied by Prodotti. See Issues and
Decision Memorandum at Comment 4. Prodotti argues that this multiple conversion was
unnecessary.6
The court concludes that Commerce’s unique methodology merely corrected an
5
Commerce Regulation 19 C.F.R. §351.415 tracks this statute and has the same
requirements.
6
The computer program used by Commerce confirms that the agency converted those
sales originally transacted in dollars three times: (1) from lira (as recorded in Prodotti’s records)
to U.S. dollars; (2) from U.S. dollars back to lira (returning to Prodotti’s original figures); (3)
from lira to U.S. dollars (using the exchange rate provided by Prodotti, presumably what it had
originally used to record the dollar sales as lira sales).
CONSOL. COURT NO . 01-00020 PAGE 7
unintentional excess conversion that would not have occurred but for Prodotti’s confusing
submission. Moreover, Prodotti has not shown how it was prejudiced by the correction.
Because the parties agree that Commerce reconverted sales data using the same exchange rate as
Prodotti, the court fails to see how the resulting margin was adversely affected. In fact, Prodotti
does not even assert that it was incorrect. The court finds no meaningful error in Commerce’s
currency conversion.
C. Level of Trade Analysis
Section 773(a)(1)(B) of the Tariff Act requires that Commerce establish NV based on
home market sales at the same level of trade (“LOT”) as the constructed export price or export
price. See 19 U.S.C. 1677b(a)(1)(B)(i); see also Statement of Administrative Action § B.2.c.(4) ,
accompanying H.R.Rep. No. 103-826(I), at 892, reprinted in 1994 U.S.C.C.A.N. 4040, 4215
(“SAA”). 19 C.F.R. § 351.412(c)(2) states that Commerce “will determine that sales are made at
different levels of trade if they are made at different marketing stages (or their equivalent).”
When sales in the U.S. and respondent’s home market cannot be compared at the same LOT, an
adjustment to NV may be appropriate. SAA § B.2.c.(4) ¶ 3. The statute provides for a LOT
adjustment if the difference in level of trade involves the performance of different selling
activities. 19 U.S.C. § 1677b(a)(7)(A).
Prodotti reported ten customer categories in its home market as the basis for identifying
sales at different levels in the chain of distribution. Rather than adopt Prodotti’s grouping,
Commerce developed a methodology to analyze the various selling functions of a particular seller
by “assigning a ranking factor (i.e. high, medium, low) to a selling function (i.e. freight and
delivery, or warehousing) solely based upon the number of observations for which a direct
expense associated with the selling function actually occurred.” See Issues and Decision Memo,
CONSOL. COURT NO . 01-00020 PAGE 8
Comment 5A. The resulting value was used to categorize different levels of trade.7 Commerce’s
LOT methodology was based on the premise that different LOTs are characterized by purchasers
and sellers at different places in the channel of distribution and performing qualitatively or
quantitatively different functions. See Issues and Decision Memo, Comment 5A.
Prodotti argues that this analysis is distortive because it ignores qualitative differences in
the various selling functions. According to Prodotti, different selling functions were erroneously
presumed to have equal value regardless of actual expense or value (i.e. a service that provides
minimal value is given the same weight as a service that provides substantial value).8 This
presumption becomes problematic when the seller is categorized solely based on the number of
observations. For example, if two sellers employ the same channel of distribution (e.g. broker at
a substantial cost) but one employs a second (e.g. local freight transportation at a minimal cost),
the seller utilizing the single function is assigned a significantly lower overall value even though
the second seller’s expenses were only slightly more than the first. At oral argument, Commerce
conceded that this quantitative analysis could result in significantly different values for almost
7
Based upon its analysis of the selling functions associated with Prodotti’s customer
categories, Commerce developed the following groupings:
Group 1 - (1) distributors
(4) hypermarkets
Group 2 - (2) stores
(3) wholesalers
(5) restaurants
(7) peddlers
(9) private clubs/others
Group 3 - [ ] other pasta manufacturers
8
Prodotti points to Commerce’s analysis of “Freight and Delivery” function where
Commerce gave more weight to a function that cost [ ] lira than to a function that cost over [
] lira.
CONSOL. COURT NO . 01-00020 PAGE 9
identical sellers, but explained that this particular analysis did not determine the final LOT, rather
a more general qualitative approach was used.
While the court questions the usefulness of this quantitative analysis for any purpose,
Prodotti has not explained how the analysis adversely affected the margin other than to state that
the analysis was “distorted.” In the absence of any alleged prejudice, the court declines to
remand on this issue.
D. Cost of Production
1. Period of Review
To calculate the dumping margin, Commerce compares NV, the price of Prodotti’s
product in its home market, Italy, to EP, the price of Prodotti’s product in the U.S.9 See 19
U.S.C. § 1677b (a). In determining NV, Commerce may disregard home market sales (“HM”)
below the cost of production (“COP”),10 if (1) these sales have been made over an extended
period of time in substantial quantities; and (2) not at prices which would permit recovery of all
costs withing a reasonable period of time. See 19 U.S.C. §§ 1677b (b) (1) (A) and (B). With
9
19 U.S.C. § 1677a (a) provides that the EP is the “price at which the subject
merchandise is first sold (or agreed to be sold) before the date of importation by the producer or
exporter outside of the U.S. to an unaffiliated purchaser . . .”
10
19 U.S.C. § 1677b (b) (3) reads:
the cost of production shall be an amount equal to the sum of--
(A) the cost of materials and of fabrication or other processing of any kind employed in
producing the foreign like product, during a period which would ordinarily permit the
production of that foreign like product in the ordinary course of business;
(B) an amount for selling, general, and administrative expenses based on actual data
pertaining to production and sales of the foreign like product by the exporter in question; and
(C) the cost of all containers and coverings of whatever nature, and all other expenses
incidental to placing the foreign like product in condition packed ready for shipment.
CONSOL. COURT NO . 01-00020 PAGE 10
respect to the first prong, the statute states that an “extended period” of time means “a period that
is normally 1 year, but not less than 6 months.” 19 U.S.C. § 1677b (b) (2) (B) (emphasis added);
see also SAA § B.3. Prodotti argues that Commerce’s methodology is flawed because: (1)
Commerce erroneously employed a seventeen month POR; (2) Commerce failed to make
appropriate allowances for price fluctuations of wheat semolina; and (3) Commerce failed to
match the POR for HM total sales and the POR for sales below COP.
Prodotti primarily argues that 19 U.S.C. §1677b (b) (2) (B) does not provide for a POR in
excess of one year and, therefore, Commerce’s seventeen month POR was not in accordance with
law.11 19 CFR § 351.406 (b) states that “the extended period of time... normally will coincide
with the period in which the sales under consideration of the determination of normal value were
made.” In addition to sales made during the POR, it is common and accepted practice for
Commerce to consider sales within 90 days before and 60 days after the POR for comparison.
See AIMCOR v. U.S., 86 F.Supp.2d 1248, 1255 n 4 (Ct. Int’l Trade 1999) (quoting Certain
Circular Welded Carbon Steel Pipes and Tubes From Thailand; Final Results of Antidumping
Duty Administrative Review, 61 1,328, 1,332 (1996) (“The Department has implemented the
contemporaneous 90/60 window in order to fulfill the statutory requirements in section 773(a)(1)
of the Tariff Act that [fair market value] be based on the price of contemporaneous sales of such
or similar merchandise.”)). Here, Commerce first defined the POR as one year and then included
sales within this “90/60 day window of contemporaneity.” The resulting analysis of seventeen
11
Following oral argument, Prodotti filed a motion for factual correction on the ground
that the court mistakenly assumed that a seventeen month POR was “normal.” The court
specifically addressed Prodotti’s concerns at oral argument expressly noting that the seventeen
month period included the window of contemporaneity. Prodotti’s motion was not to make a
factual correction but merely was an attempt to reargue the legitimacy of the POR and therefore
is stricken.
CONSOL. COURT NO . 01-00020 PAGE 11
months of sales is neither prohibited by statute nor inconsistent with Commerce’s normal
practice.
Prodotti next argues that Commerce failed to make allowances for declines in wheat
semolina prices. Commerce generally calculates a single weighted-average cost for the entire
POR for respondents in non-high inflationary economies, unless this methodology results in
inappropriate comparisons -- i.e. when there is a single-primary input product and that input
experiences a significant and consistent decline or rise in its cost throughout the reporting period.
See Thai Pineapple v. United States, 273 F.3d 1077, 1084 (Fed. Cir. 2001). Prodotti argues that
Commerce did not properly adjust the annual weight-averaged direct material costs to adjust for
the decline in wheat semolina prices.
Both parties agree that wheat semolina is a substantial portion of the total cost of
manufacture (“TOTCOM”). In fact, Commerce considered wheat semolina a single-primary
input product. Commerce determined that there was a consistent decline in wheat semolina
prices for only six months and that the market prices decreased by only twelve percent or less.
Issues and Decision Memo at Comment 8. Prodotti argues that prices declined somewhat more
drastically.12 Not surprisingly, both parties argue that the other’s analysis is crafted to calculate
the maximum or minimum decline. There is no bright line standard for determining a significant
decline. A review of the data provided, however, suggests that the price of wheat semolina was
not subject to a substantial decline but was, at best, subject to price fluctuations - decline and
recovery. Prodotti’s claim was largely based on the premise that wheat semolina prices are
12
Prodotti claims that the price of wheat semolina fluctuated as much as [ ].
CONSOL. COURT NO . 01-00020 PAGE 12
seasonal,13 which in itself suggests price fluctuation rather than substantial decline. The court
finds that Prodotti failed to show that the price drastically declined so as to require Commerce to
deviate from its normal methodology.
Prodotti last argues that the POR for COP does not match the POR for determining
volume.14 Prodotti argues that Commerce reviewed data within the window of contemporaneity
for COP purposes but not for volume and, therefore, Commerce did not properly correlate the
data. Commerce is not required to match the period for assessing the total volume of sales in the
HM to the period of assessing COP. See Thai Pineapple, 273 F.3d at 1084 (“We do not read the
statutory language as specifying the period to be used when determining costs ... the statute does
not dictate the methodology for calculating costs of production...or for matching those costs
against sales.”).
2. Rounding and Other “Noise”
Prodotti argues that Commerce improperly excluded certain sales as below-COP due to
impermissible rounding and truncating. Prodotti points to at least 1000 sales that were found to
be below cost by less than 2/10 of a cent, and more than 300 that were below 4/100 of a cent.
Prodotti argues that these barely below-COP sales should not have been rejected as below cost
because the underselling was so inconsequential that it should be considered de minimis.
13
Prodotti contends that Commerce’s extended POR resulted in a double-counting of
certain “in season” months (May through August), during which agricultural seasonal products
like wheat semolina are sold at lower prices. The record does not reveal any evidence as to
wheat growing cycles and the court declined Prodotti’s invitation to take judicial notice of
agricultural cycles in the Northern Hemisphere.
14
The extended POR for “Sales Below Cost of Production” began May 1, 1998 and
ended September 30, 1999 (July 1, 1998 to June 30, 1999 excluding the 60/90 day window of
contemporaneity). See Issues and Decision Memorandum at 16.
CONSOL. COURT NO . 01-00020 PAGE 13
Commerce maintains that 19 U.S.C. § 1677b (b) (1) establishes a bright-line test to
determine whether sales are below cost. The statute does not contain a de minimis provision that
prohibits Commerce from disregarding sales that are only slightly below cost. The statute does,
however, contain a moderating provision. Under 19 U.S.C. § 1677b (b) (1) (B), Commerce may
disregard below-COP sales only if they “were not at prices which permit recovery of all costs
within a reasonable period of time.” Despite that provision, Prodotti did not argue or submit data
showing that the barely below-COP sales were offset by sufficiently above cost sales so that costs
are recovered over time. Absent such a showing, the court can find no alternative statutory or
regulatory basis to require inclusion of the contested sales.
Prodotti also argues that Commerce extended certain two-digit data into four-digit data,
and later truncated the data thereby distorting the data. Commerce rejects Prodotti’s claim that it
truncated data as factually wrong. Commerce is bound by neither statute nor regulation in its
methodology regarding rounding, i.e. whether it rounds data to two, three or four decimals.
Further, Prodotti has not adequately explained how it was prejudiced by any truncation.
Prodotti’s sole explanation is that the resulting “noise” distorted the analysis. The court declines
to remand on this issue.
E. Verification
1. Commerce’s Decision to Conduct Verification
Prodotti next argues that verification was inappropriate because Commerce did not show
“good cause” sufficient to initiate verification. 19 U.S.C. §1677m(i)(3) provides Commerce with
the authority to verify information submitted by respondents in a sunset review. §1677m(i)(3)
requires Commerce to conduct verification if timely requested by an interested party and if good
cause for verification is shown. Timken Co. v. United States, 18 CIT 486, 495-96. (1994) (citing
CONSOL. COURT NO . 01-00020 PAGE 14
Torrington Co. v. United States, 17 CIT 951, 955, 832 F.Supp. 393, 397 (1993)).15 The statute
describes when Commerce must conduct verification. The court does not read §1677m(i)(3) to
contain a limitation on Commerce’s discretion to voluntarily and in good faith verify data.
Commerce is generally given wide latitude in verification procedures. See Shakeproof Assembly
Components Division of Illinois Tool Works, Inc. v. United States, 102 F. Supp. 2d 486, 495 (Ct.
Int’l Trade 2000) (“[Commerce] enjoys broad discretion in allocating investigative and
enforcement resources.”). The court finds no statutory or regulatory basis to restrict Commerce’s
ability to verify its own data.16 Even if a statutory or regulatory restriction existed, Commerce
has demonstrated good cause here.
In its Issues and Decision Memo, Commerce discusses at length why changes in
Prodotti’s organizational structure and revisions to its questionnaire responses prompted
verification. See Issues and Decision Memo at Comment 8. Prodotti argues that there were no
organizational changes. The record, however, reveals that Prodotti was operating a new pasta
factory owned by another company under review. Prodotti also argues that it did not submit
numerous supplemental or revised questionnaires. Prodotti does not dispute, however, that there
15
19 U.S.C. §1677m(i) reads in relevant part:
The administering authority shall verify all information relied upon in making--
...
(3) a final determination in a review under section 1675(a) of this title, if--
(A) verification is timely requested by an interested party as defined in section 1677(9)(C), (D),
(E), (F), or (G) of this title, and
(B) no verification was made under this subparagraph during the 2 immediately preceding
reviews and determinations under section 1675(a) of this title of the same order, finding, or
notice, except that this clause shall not apply if good cause for verification is shown.
16
19 C.F.R. § 351.307(b)(4) provides that verification may be refused, but facts available
will be used in such instances.
CONSOL. COURT NO . 01-00020 PAGE 15
were some supplemental responses and numerous discussions between Commerce and Prodotti
regarding clarification of the questionnaires and Prodotti’s proposed revised responses. Both
parties agree that, at minimum, there was considerable confusion surrounding Prodotti’s
submissions. It therefore was reasonable for Commerce to attempt verify the various responses.
Because verification was not only reasonable but likely necessary for consideration of the data,
the court finds that Commerce had good cause to conduct verification.
Consistent with 19 U.S.C. §1677m(i), Petitioners requested verification of “any exporter
that has not been subject to verification in the two immediately preceding reviews.” Verification
Request at 1-2. Prodotti claims that, because the request did not specifically identify Prodotti, it
was overly broad and, therefore, defective. The court rejects Prodotti’s technical argument.
First, there is no statutory requirement that petitioner identify individual respondents by name.
Second, there were only seven respondents in this review, therefore, Prodotti was reasonably
apprised that it was subject to verification.
2. Program Manager
Prodotti argues that Commerce improperly allowed the program manager to participate in
the verification process. Because verification is an investigative tool, Commerce is given wide
latitude in verification procedures. See Micron Tech, Inc., v. United States, 117 F.3d 1386, 1396
(Fed.Cir. 1997). There is a presumption that Commerce will act in good faith. See N.E.C. Corp.
v. United States, 958 F.Supp. 624, 631-32 (Ct. Int’l Trade 1997). Commerce maintains that it
has the discretion to allow the program manager to participate and that it is customary for the
program manager to be involved in verification. Prodotti argues that the program manager is the
de facto decision maker and the manager’s involvement “raises questions as to the validity of the
determination.” Prodotti does not explain further but, instead, suggests that it was singled out
CONSOL. COURT NO . 01-00020 PAGE 16
for participation by the program manager.17 Even if true, the complications surrounding
Prodotti’s questionnaire responses would reasonably explain the need for additional oversight.
Regardless, Prodotti cites no provision precluding participation of a project manager in
verification. The court finds no error in this regard.
H. Interest Rate
Prodotti argues that Commerce should have used Italian interest rates in determining its
interest expenses for “circumstances of sale” adjustments. In calculating NV, Commerce must
take into consideration any differences in the circumstances of sale between the home market and
the U.S. market. 19 U.S.C. §1677b (a)(6)(C). Circumstances of sale adjustments include credit
expenses. NTN Bearing Corp. of America v. United States, 104 F. Supp. 2d 110, 122 (Ct. Int’l
Trade 2000). These imputed credit expenses are to be calculated with the short-term interest rate
tied to the currency of sale. Import Administration Policy Bulletin 98.2 at 4. Commerce submits
that it used the Italian interest rate for those sales transacted in lira, and the U.S. interest rate for
those sales transacted in dollars. Prodotti argues that, because all of entries were in lira, the
Italian interest rate should be applied to all sales, even those made in dollars. The court finds that
Commerce properly applied the U.S. interest rate to dollar sales and the Italian interest rate to
sales in lira. There was no error.
I. Disclosure untimely/incomplete
Prodotti asserts that Commerce did not disclose the calculations of the dumping margins
in a timely manner. 19 C.F.R. § 351.224(b) requires that Commerce disclose the calculations
performed in connection with a preliminary report within five days of the announcement.
17
Prodotti cites the Third Party Verification Reports, which states that in all other
verifications in Italy, the manager did not participate. Id.CONSOL. COURT NO . 01-00020 PAGE 17
Prodotti concedes that Commerce provided the computer program used to calculate the margins
within five days and that Commerce later provided additional print-outs of some calculations at
Prodotti’s request. Prodotti argues that the initial disclosure of the computer program alone was
insufficient to satisfy § 351.224(b) and that Commerce’s later release of various print-outs were
incomplete and untimely. Prodotti claims that this non-disclosure affects its ability to comment
effectively on the issue.
Disclosure of a diskette with the margin program is sufficient to satisfy § 351.224(b).
See Sugiyama Chain Co. v. United States, 852 F. Supp. 1103, 1115 (Ct. Int’l Trade 1994)
(“complete computer printouts of Commerce’s calculations not required”); see also Torrington
Co. v. United States, 786 F. Supp. 1027, 1030 (Ct. Int’l Trade 1992). Commerce submitted the
diskette to Prodotti within five days and, therefore, submitted the information in a timely manner.
Commerce need not provide full print-outs of all calculations. Voluntary disclosures were, at
worst, supplements to original disclosure. Regardless, Prodotti was provided sufficient
information to respond. Moreover, Prodotti has not demonstrated how it was actually prejudiced
by any delinquent disclosure.
J. Pasta Shape Analysis
As a final matter, Prodotti claims that Commerce’s analysis of various pasta products was
erroneous. Prodotti argues that Commerce improperly separated similar pasta products. After
review of Prodotti’s claim, Commerce voluntarily requests that this specific issue be remanded
for further analysis. Prodotti requests that the court remand the issue with a special instruction to
group particular pasta shapes. The court will not presume, however, that an agency will
incorrectly analyze an issue on remand.
“[A]dministrators ‘are assumed to be men of conscious and intellectual discipline,
CONSOL. C O U R T ~ i o0100020
. PAGE 18
capable of judging a particular controversy fairly on the basis of its own circumstances.”’
/Withrowv. Larkin, 421 U.S. at 35, 5 5 (1975)] (quoting [United States V. Morean, 313
U.S. 409, 421 (1941)l). Were we routinely to accept challenges to the administrative
decision-making process based on claims of prejudgment, we would undermine the
presumption that administrators fulfill their obligations with the highest level of integrity
and honesty.
NEC Coiv. v. T~J.S., F.3d 1361, 1373 (Fed. Cir. 1998). Moreover, Commcrce’s assent to
151
reinand without argument implies that it intends to consider the matter in good faith. Prodotti
will have sufficient opportunity to challenge the remand results if unhappy with the outcome.
CONCLUSION
For the reasons discussed, the court remands this matter on the sole issue of pasta shape
analysis. While some of Prodotti’s challenges to Commerce’s methodologies inay havc
theoretical merit, the court finds that Prodotti has failed to show how it was prejudiced. Other
challengcs are simply unsubstantiated. Commerce shall issue its Reinand Determination on or
before August 16, 2002. Objections may be made within 30 days thereafter. Parties may submit
comments on those objections within 10 days after objcctions are due.
/ Jane A. Reslani
Dated: New York, New Yoi-k
u’ Judgc
This 16”’day of July, 2002
ERRATA
Prodotti Alimentari Meridionali, S.r.L. v. United States, Court No. 01-00020, Slip Op. 02-68,
dated July 16, 2002.
In the twenty-third line on page 1, replace the word “Michelle” with the word “Michele”.