Roquette Freres v. United States, Court No. 82-5-00636.

• Decision Date: 19 March 1984
• Docket Number: Court No. 82-5-00636.
• Parties: ROQUETTE FRERES and Roquette Corporation, Plaintiffs, v. The UNITED STATES, Defendant, and Phizer, Inc., Intervenor.
• Court: U.S. Court of International Trade

583 F. Supp. 599

ROQUETTE FRERES and Roquette Corporation, Plaintiffs, v. The UNITED STATES, Defendant and Phizer, Inc., Intervenor.

Court No. 82-5-00636.

United States Court of International Trade.

March 19, 1984.

Wald, Harkrader & Ross, Washington, D.C. (Joel E. Hoffman, Mark R. Joelson, Marilyn E. Kerst, Mark B. Stern, and Kenneth H. Hall, Washington, D.C., on the briefs), for plaintiffs.

Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C. (David M. Cohen, Director, Commercial Litigation Branch and A. David Lafer, Washington, D.C., on the briefs), for defendant.

Barnes, Richardson & Colburn, New York City (E. Thomas Honey, Michael A. Johnson, and James H. Lundquist, New York City, on the briefs), for intervenor.

BOE, Judge:

The above entitled action is before the court pursuant to Rule 56.1 cross motions by plaintiffs, Roquette Freres and Roquette Corporation ("Roquette"), and intervenor, Phizer, Inc., each challenging in part the administrative determinations upon the agency record.¹ Plaintiffs challenge the final affirmative determination of the International Trade Administration ("ITA") with respect to sales at less than fair value of sorbitol from France, and the final affirmative determination of the International Trade Commission ("ITC") on remand of material injury to an industry in the United States by reason of imports of crystalline sorbitol from France. Intervenor contests the ITC's final negative determination on remand of no material injury to the liquid sorbitol industry in the United States.

The pertinent facts are as follows. On June 15, 1981, Phizer filed a petition with the ITA alleging that Roquette was selling sorbitol in the United States at less than fair value and that the sales were causing material injury to the domestic industry. Pursuant to 19 U.S.C. § 1673d, the ITA determined that Roquette was selling sorbitol at less than fair value and published its final affirmative determination. Sorbitol From France; Final Determination of Sales at Less than Fair Value, 47 Fed. Reg. 6459 (February 12, 1982). The ITC, in accordance with 19 U.S.C. § 1673d(b), subsequently determined that an industry in the United States was materially injured by reason of imports of both crystalline and liquid sorbitol from France. Sorbitol From France; Inv. No. 731-TA-44 (Final), 47 Fed.Reg. 14981 (April 7, 1982). After setting dumping margins for liquid and crystalline sorbitol, the ITA published its final antidumping duty order. Sorbitol From France; Antidumping Duty Order, 47 Fed.Reg. 15391 (1982).

Roquette filed a summons challenging the antidumping duty order on May 7, 1982. The court granted Phizer's motion for intervention on July 30, 1982. The defendant moved to suspend all further proceedings and to remand the action to the ITC on the basis "that substantial questionnaire information relevant to the Commission's determination had not been presented to the Commissioners in the Commission's staff report or during the course of the investigation."

The court in granting the defendant's motion directed the ITC:

to consider in full all relevant information presently in its possession or which hereafter may be presented to it as to whether an industry was materially injured by reason of imported sorbitol from France being sold at less than fair value and further ordered the determination so made by the Commission shall be returned to this court within a period of sixty (60) days from the date of entry of this order.

6 CIT ___, Slip Op. 83-71 (1983).

On the basis of data obtained in the prior as well as remand investigation, the Commission determined that sorbitol imports from France constituted two like products affecting two domestic industries. For purposes of analysis, the Commission on remand obtained separate additional data, not available to the Commission at the time of its original determination, for crystalline and liquid sorbitol on profitability, capacity, capacity utilization, employment, and exports.

In evaluating the data for each product, the Commission found that liquid and crystalline sorbitol imports had different effects on the two respective domestic industries. The ITC concluded that declines in production, commercial shipments, and the market share of domestic crystalline sorbitol evidenced material injury to that industry. As to liquid sorbitol, however, the ITC determined that increased United States production and commercial shipments in the first eleven months of 1981 indicated a healthy domestic industry.

ITA Determination

In its final determination that liquid and crystalline sorbitol from France were being, or likely to be, sold in the United States at less than fair value, the ITA denied a claimed adjustment to the United States purchase price, which Roquette alleged would have eliminated the entire dumping margin assessed on imports of liquid and crystalline sorbitol.

Roquette predicates its claim for an adjustment to the purchase price on 19 U.S.C. § 1677a(d)(1)(B). This statute provides for an adjustment to the purchase price of the imported product by an increase equivalent to:

the amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the merchandise to the United States.

Id. (emphasis added).² It is undisputed that Roquette imported large quantities of United States corn upon which it paid import levies and that Roquette received an export refund based on the corn content of the exported sorbitol product. See 18 O.J. Eur.Comm. (No. L 281) 1,2,7 (1975); 23 O.J.Eur.Comm. (No. L 323) 27 (1980).

The ITA, however, denied the price adjustment, determining that:

1. the "import levy" and the "export" restitution payments are not directly linked to, or dependent upon, one another within the context of EC regulations.

2. The exporters may receive these payments regardless of whether or not they imported corn and paid the "import levy."

Roquette contends that under § 1677a(d)(1)(B) the ITA must make its determination on a "case by case" basis without regard to the nature and function of the EC import-export program. The court is unable to agree with the plaintiff. Analysis of the EC regulations reveals that agricultural products may enter the EC under one of two possible processing procedures. Roquette chose not to avail itself of the inward processing arrangement, which provides for the exemption from agricultural levies on imported goods intended for manufacture into products for export.³ Instead, Roquette chose a procedure which requires the application of two EC regulations rather than one. The plaintiff paid import levies on the corn it imported from the United States into France, 18 O.J.Eur. Comm. (No. L 281) 1,2,7 (1975). Subsequently, Roquette received export refunds on the corn content of the exported sorbitol product. 23 O.J.Eur.Comm. (No. L 323) 27 (1980). This latter procedure, unlike inward processing,⁴ offers no direct link between levies and refunds on imported and exported goods.

Under the import-export program utilized by Roquette, EC payment of the export refund is not by any means dependent on the prior payment of import levies. Whenever a French manufacturer exports a product containing corn, the aforecited EC regulation provides for the payment of an export refund regardless of (1) whether or not the firm used imported corn, and (2) whether or not the firm paid any import levies. In short, the payment of an import levy is not a precondition for the receipt of an export refund. This fact alone negates Roquette's contention that under its chosen import-export program it both paid import levies on United States corn and received export refunds by reason of the exportation of the merchandise to the United States. Roquette admits that "export payments were `available' to other persons exporting goods manufactured from Community-origin products upon which no import levies were paid."

Counsel for plaintiff has fashioned an argument for allowance of adjustment to purchase price based on the drawback statute of the United States. See 19 U.S.C. § 1313. In considering this argument, parties make reference to the legislative history accompanying the Antidumping Act of 1921, which originally contained the same language presently in § 1677a(d)(1)(B). The Senate Report on the then proposed bill stated: "In order that any drawback given by the country of exportation upon the exportation of the merchandise ... shall not constitute dumping, it is necessary also to add such items to the purchase price." S.Rep. No. 16, 67th Cong., 1st Sess. 12 (1921) (emphasis added). The court does not deem this statement dispositive of the present determination. It merely serves to instruct that an adjustment to the purchase price should be allowed when the country of exportation makes refund payments constituting a drawback. It does not attempt to serve as guidance in determining whether a drawback exists.

The United States Court of Customs Appeals defined drawback as the "repayment of moneys previously paid in by the exporters upon goods previously imported." Nicholas & Co. v. United States, 7 Ct. Cust.Appls., 97, 110 (1916), aff'd, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919). The purposes of the drawback provision are:

not only to build up an export trade, but to encourage manufactures in this country, where such manufactures are intended for exportation, by granting a rebate of duties upon the raw or prepared materials imported, and thus enabling the manufacturer to compete in foreign markets with the same articles manufactured in other countries.

Tide Water Oil Co. v. United States, 171 U.S. 210, 216, 18 S.Ct. 837, 839, 43 L.Ed. 139 (1898). See United States v. National Sugar Refining Co., 39 CCPA 96, 99 (1951).

Roquette submits that it used either imported corn or domestic EC corn of like kind and quality to manufacture sorbitol which it...