193 F.Supp.2d 1331 (CIT. 2002), Court 00-06-00291, Viraj Group, Ltd. v. United States

Docket Nº:Court 00-06-00291
Citation:193 F.Supp.2d 1331
Party Name:Viraj Group, Ltd. v. United States
Case Date:February 26, 2002
Court:Court of International Trade
 
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Page 1331

193 F.Supp.2d 1331 (CIT. 2002)

VIRAJ GROUP, LTD. Plaintiff,

v.

UNITED STATES of America, Defendant,

and

Carpenter Technology, Corp., et al., Defendant-Intervenors.

Slip Op. 02-24.

Court No. 00-06-00291.

United States Court of International Trade.

Feb. 26, 2002

Page 1332

Ablondi, Foster, Sobin & Davidow (Peter Koenig), Washington, D.C., for Plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Lucius B. Lau, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; David W. Richardson, Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Counsel, for Defendant.

Collier Shannon Scott, PLLC (Robin H. Gilbert, Laurence J. Lasoff), Washington, D.C., for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

Exercising jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994), this Court reviews the Department of Commerce's (Commerce) Final Results of Redetermination Pursuant to Court Remand, Viraj Group, Ltd. v. United States of America and Carpenter Technology, Corp., et al., Slip Op. 01-104 (CIT August 15, 2001) ( Remand Determination ) to determine whether Commerce's approach to the Indian rupee's devaluation during the administrative review period, December 1, 1997 through November 30, 1998, is supported by substantial

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evidence on the record and otherwise in accordance with law.

BACKGROUND

In Plaintiff Viraj Group, Ltd.'s (Plaintiff or Viraj) initial challenge before this Court, Plaintiff raised the issue of whether the exchange rate used by Commerce to convert Indian rupees into United States dollars had created an inaccurate dumping margin in Stainless Steel Wire Rod From India; Final Results of Antidumping Duty Administrative Review, 65 Fed.Reg. 31,302 (May 17, 2000) ( Final Results ). Specifically, Plaintiff argued that use of the November 3, 1997 exchange rate distorted dumping margin calculations because the rupee's subsequent devaluation required Viraj to pay more rupees for imported raw materials. Viraj ultimately recovered its higher cost of production because the devaluation caused it to receive more rupees for the U.S. dollar price of its subject merchandise. Commerce's use of the earlier exchange rate, however, failed to reflect this offset and caused an understatement of the rupees actually received, resulting in a dumping margin.

This Court remanded this issue to Commerce but sustained the remainder of the Final Results in Viraj Group, Ltd. v. United States of America and Carpenter Technology, Corp., et al., 162 F.Supp.2d 656 (CIT 2001) ( Viraj I ). Specifically, this Court directed Commerce to: (1) articulate the reasoning behind its approach to the devaluation of the Indian rupee during the period of review; and (2) properly address and explain whether Commerce's currency conversion methodology resulted in an accurate dumping margin and, should it be necessary, recalculate such margin as may be required.

On October 1, 2001, Commerce filed its Remand Determination with this Court, explaining why it had decided alternative means for accounting for the Indian rupee's depreciation were unnecessary. As background, Commerce discussed two types of exchange rate fluctuations-one which it ignores, and the other which it adopts. Remand Determination at 2-3. Under the first, a spot exchange rate that deviates from the benchmark rate by more than 2.25 percent on a given day is ignored as unrepresentative of the underlying currency value because the "fluctuation" is "outside the normal range." Id. at 2. Under the second,

where the currency is depreciating over time, and where the rate of change in the exchange rate and the overall change are such that the exchange rate movement clearly is more than just a fluctuation that can be ignored, i.e., it represents an event signaling a fundamental change in the underlying value of the currency, the spot rate on a given day (in the period of currency depreciation) is the best measure of the new foreign currency value and is therefore the appropriate exchange rate of [sic] currency conversion purposes for any sale occurring on that day. Thus, "fluctuation" in this context means "a change within the normal range."

Id. at 2-3.

Next, Commerce distinguished the instant case from two scenarios in which currency conversion concerns caused market participants to make pricing decisions based upon anticipated future currency values. In the first scenario, hyperinflation in Brazil increased prices and costs measured in home currency units, requiring the respondent's pricing decisions to reflect an expected future exchange rate. See Budd Co., Wheel & Brake Div. v. United States, 746 F.Supp. 1093 (CIT 1990). Commerce reasoned in the Remand Determination that its calculations in such a situation should reflect the linkage between hyperinflation, pricing decisions,

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and anticipated exchange rates. In the instant case, however, Commerce asserted Indian market conditions during the period of review did not make it reasonable to think-and Viraj did not claim-that Viraj had set export price on the basis of a forward exchange rate.

Remand Determination at 3.

In the second scenario, comprised of two cases, the Korean won fell 40 percent over two months and the Thai baht dropped 18 percent in one day. Commerce stated that these currencies experienced such rapid and large drops in value of apparent medium- to long-term duration that market participants based their changed pricing decisions upon the most current exchange rate data available-the daily current spot exchange rate. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils From the Republic of Korea, 64 Fed.Reg. 137 (Jan. 4, 1999) ( Stainless Steel from Korea ) and Certain Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of Antidumping Duty Administrative Review, 64 Fed.Reg. 56,759 (Oct. 21, 1999) ( Pipes and Tubes from Thailand ). In contrast...

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