Date of Sale Issue Has No Effect on AD Rate, US Tells CIT, Urging Court to Sustain Remand Results

The Commerce Department need not address the issue of an antidumping respondent's date of sale since it would have no material effect on the respondent's rate, the Department of Justice said in a Dec. 7 brief at the Court of International Trade. Responding to the antidumping petitioner's comments that argued that Commerce needs to resolve the U.S. date of sale issue as required by the court, the U.S. said that this would be an exercise in futility that is not required by the relevant caselaw since it would be immaterial to the final rate. The respondent, Turkish steel company Borusan Mannesmann echoed these sentiments in its own brief, and added that two-and-a-half years is long enough for it to have waited for the relief that it is entitled to (Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. U.S., CIT Consol. #19-00056).

The case concerns an antidumping duty investigation into large diameter welded pipe from Turkey. Prior to the investigation, Borusan entered into a joint venture with two other Turkish manufacturers that won a bid for a gas pipeline project. In the joint venture agreement, each company agreed to reimburse the others for any damages resulting from a failure to fulfill contractual obligations. After adjustments were made to the sales contract, the mutual obligation clause of the JVA came into effect since the customer said it wanted to collect late delivery penalties.

When the antidumping investigation began, Borusan argued for a post-sale price adjustment for the entire value of the penalty even though it had yet to make any penalty payments at the time. Subsequently, the JVA members negotiated the amount of the penalties and agreed to distribute the cost proportionately, with Borusan paying the largest share.

Commerce then rejected Borusan's request for a post-sale adjustment amounting to the entirety of the penalty paid. Instead, the agency adjusted the post-sale price by only one-third of the penalty costs, finding that the client only knew of the JVA members' intent to use a one-third split of the penalty costs. Further, Commerce said that the JVA members didn't begin to negotiate the final penalty allocation until after the date of the sale.

Following initial litigation at CIT, the trade court said that the terms of the JVA were incorporated into the sales contract, meaning the customer should be considered aware of the terms of splitting up any penalties. The court also said it's only necessary that the terms of such a penalty be expressed and not the actual amount paid for the customer to be aware of the terms. CIT upheld a full post-sale price adjustment.

The Federal Circuit then reversed CIT's decision, holding that Commerce correctly determined that the final allocation method was not established work known to the client since the parties negotiated their shares of the fee after it was imposed (see 2107200038). CIT then remanded this case to Commerce to comply with this decision, also instructing Commerce to come to a conclusion on when Borusan's date of sale was (see 2108270051). In its remand, the agency reverted to the one-third price adjustment but did not make a decision on the date of the sale since the resulting dumping rate was zero percent, making the date of the sale irrelevant.

While Borusan addressed this deficiency in Commerce's remand, it still called for the court to sustain the remand results. The comments submitted by the American Line Pipe Producers Association, on the other hand, are seeking another remand to address the date of sale issue. It argued that a remand was needed for critical reasons of efficiency and fairness and so that "any issues requiring further appeal may be handled simultaneously" (see 2111230069).

The U.S and Borusan rebutted this in their comments, arguing that the date of sale "would have no impact on Borusan's margin as it is already zero." The most recent remand told Commerce to revert to its decision granting a partial post-sale price adjustment and to remove the particular market situation adjustment to Borusan's costs. The agency did so. "This litigation has already dragged on for more than 2.5 years and Plaintiff BMB has waited long enough to receive the relief to which it is entitled -- the termination of the antidumping duty (“AD”) order and refund of the AD duties paid under the order," Borusan said.