261 F.3d 1371 (Fed. Cir. 2001), 00-1400, American Silicon Technologies v United States
|Citation:||261 F.3d 1371|
|Party Name:||AMERICAN SILICON TECHNOLOGIES, ELKEM METALS COMPANY and GLOBE METALLURGICAL, INC., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee, and RIMA INDUSTRIAL S/A, Defendant-Appellee, and GENERAL ELECTRIC COMPANY, Defendant-Appellee.|
|Case Date:||August 16, 2001|
|Court:||United States Courts of Appeals, Court of Appeals for the Federal Circuit|
Appealed from: United States Court of International Trade Judge Judith M. Barzilay
[Copyrighted Material Omitted]
Clifford E. Stevens, Jr., Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, of Washington, DC, argued for plaintiffs-appellants. With him on the brief was William D. Kramer. Of counsel was Martin Schaefermeier, Baker & Botts, L.L.P., of Washington, DC.
Reginald T. Blades, Jr., Senior Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee United States. With him on the brief was David M. Cohen, Director. Of counsel on the brief were John D. McInerney, Chief Counsel; Elizabeth C. Seastrum, Senior Counsel; Mark A. Barnett, Senior Attorney; and John F. Koeppen, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, of Washington, DC.
Philippe M. Bruno, Dorsey & Whitney LLP, of Washington, DC, for defendant-appellee Rima Industrial S/A. With him on the brief was Kevin B. Bedell.
Michael H. Stein, Dewey Ballantine LLP, of Washington, DC, argued for defendant-appellee General Electric Company. With him on the brief were Bradford L. Ward and Andrew J. Conrad. Of counsel was Jennifer Danner Riccardi.
Before LOURIE, BRYSON, and LINN, Circuit Judges.
LINN, Circuit Judge.
American Silicon Technologies, Elken Metals Company, and Globe Metallurgical, Inc. (collectively "AST" or "appellants") appeal the judgment of the United States Court of International Trade affirming the United States Department of Commerce's ("Commerce") reliance on the depreciation expenses reported by Rima Industrial S/A ("Rima") in determining Rima's dumping margin for imported silicon metal. Am. Silicon Techs. v. United States, No. 98-03-00567 (Ct. Int'l Trade Mar. 9, 2000). Because Commerce's decision to use Rima's reported depreciation is supported by substantial evidence and is otherwise in accordance with law, we affirm.
On July 31, 1991, Commerce published an antidumping duty order on silicon metal from Brazil. Antidumping Duty Order: Silicon Metal from Brazil, 56 Fed. Reg. 36,135 (July 31, 1991). In response to Commerce's Notice of Opportunity to Request Administrative Review published in July 1996, Rima and several other Brazilian producers of silicon metal requested Commerce initiate an administrative review
covering entries of the subject merchandise for the period of July 1, 1995 to June 30, 1996. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 61 Fed. Reg. 42,416 (Aug. 15, 1996). Following an extensive investigation, that included verification by Commerce of Rima's records, on February 11, 1998, Commerce concluded that silicon metal from Brazil produced by Rima and others was being sold at less than fair value ("LTFV"). Moreover, Commerce calculated a 3.08% dumping margin for Rima from the period of March 1, 1995 to February 29, 1997. Silicon Metal from Brazil; Notice of Final Results of Antidumping Duty Administrative Review, 63 Fed. Reg. 6,899 (Feb. 11, 1998) ("final results").
AST challenged the final results on several grounds at the Court of International Trade. However, the only issue still in dispute is that relating to Commerce's reliance on Rima's reported depreciation expense in computing Rima's dumping margin. Thus, we limit our discussion of the proceedings before that court to this issue. AST contended before the Court of International Trade that Commerce understated Rima's dumping margin by relying on Rima's reported depreciation expense. According to AST, in view of 19 U.S.C. § 1677b(f)(1)(A) (1994), it was improper for Commerce to rely on Rima's reported depreciation expense because it did not reasonably reflect the costs associated with the production and sale of Rima's silicon metal. AST asserted that Rima improperly shifted the bulk of the depreciation expense, which in this case is that owing to furnaces, to a period prior to the period of review, thereby skewing the calculation of the cost of producing silicon metal in such a manner as to lower its dumping margin. According to AST, the five-year straight line method used by Rima does not comport with either United States or Brazilian Generally Accepted Accounting Principles ("US GAAP" and "Brazillian GAAP," respectively) because the period of depreciation adopted does not adequately allocate the cost of those assets over their economic useful life. In addition to the inadequate allocation, AST contended that Rima's reported depreciation was unreliable because it was based on depreciation worksheets that were not kept as part of Rima's accounting system and because the reported expense did not reconcile with the fixed asset values stated in Rima's financial statements.
Commerce contended that Rima's depreciation method was consistent with Brazilian GAAP and that it reasonably relied on those records.
The Court of International Trade concluded that it was reasonable for Commerce to rely on Rima's reported depreciation expense. The court noted that 19 U.S.C. § 1677b(f)(1)(A) is silent as to the method Commerce must use to establish depreciation expenses in cost of production calculations, but among other things does state that "costs shall normally be calculated based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting principles of the exporting country . . . and reasonably reflect the costs associated with the production and sale of merchandise." 19 U.S.C. § 1677b(f)(1)(A). The court also noted that the Statement of Administrative Action ("SAA"), approved by Congress under 19 U.S.C. § 3511(a) (1994), provides that it would be appropriate for Commerce to adjust depreciation expenses "in determining whether a company's records reasonably
reflect costs, . . . [where] a firm's financial statements reflect an extremely large amount of depreciation for the first year of an asset's life, or . . . [where] there is no depreciation expense reflected for assets that have been idle." Agreement on Implementation of Article VI of the GATT, Statement of Administrative Action 807, 834-35, reprinted in 1994 U.S.C.C.A.N. 4040, 4172. In view of the gap left in the statute and the SAA, the court concluded that its review was limited to determining whether Commerce's interpretation in filling the gap regarding depreciation expense was reasonable and supported by substantial evidence.
The court concluded that Rima's reported depreciation was not in need of adjustment under the SAA because Rima did not take an extremely large amount of depreciation during the assets' first years. In addition, the court concluded that there was substantial evidence showing that the depreciation worksheets prepared for the review did reconcile to the financial statements. In particular, the court pointed out that the financial statements were independently audited, and that the auditors reported a depreciation expense in their audit opinion of the financial statements and confirmed adherence to a permissible depreciation methodology under Brazilian GAAP for that expense. Furthermore, the court concluded that AST had not provided any verifiable records that the depreciation worksheets were not consistent with Brazilian GAAP, or that the reported...
To continue readingFREE SIGN UP