                          Slip Op. 04 - 36

            UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - - x
ELKEM METALS COMPANY and GLOBE METAL-
LURGICAL INC.,                        :

                          Plaintiffs, :

                   v.                  :

UNITED STATES,                         :   Consolidated
                                           Court No. 01-00098
                          Defendant,   :

                 -and-                 :

COMPANHIA BRASILEIRA CARBURETO DE      :
CÁLCIO,
                                      :
               Intervenor-Defendant.
- - - - - - - - - - - - - - - - - - - x

                          Memorandum & Order

[Upon motion for relief from results of
 antidumping-duty administrative review,
 remand to International Trade Administration.]

                                           Decided:   April 15, 2004

     Verner, Liipfert, Bernhard, McPherson and Hand, Chartered
(William D. Kramer, Jessie Marie Brooks and Virginia C. Dailey) for
the plaintiffs.1

     Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, U.S. De-
partment of Justice (Reginald T. Blades, Jr.); and Office of Chief
Counsel for Import Administration, U.S. Department of Commerce
(John F. Koeppen), of counsel, for the defendant.

     Dorsey & Whitney LLP (Philippe M. Bruno and Rosa S. Jeong) for
the intervenor-defendant2 and Eletrosilex S/A.

     1
       Samuel J. Waldon and Matthew T. West of Baker Botts LLP,
counsel for Elkem Metals Company and Globe Metallurgical Inc. in
CIT No. 01-00082, which has been consolidated herein, have filed
papers in opposition to the motion of Eletrosilex S/A for judgment
on the agency record.
     2
       Subsequent to the service of his motion papers herein,
Philippe M. Bruno filed a notice of substitution of attorneys for
this party by Greenberg Traurig, LLP.
Consolidated
Court No. 01-00098                                            Page 2


          AQUILINO, Judge:    This case commenced pursuant to 19

U.S.C. §§ 1516a(a)(2)(A)(i)(I) and (B)(iii) and 28 U.S.C. §§

1581(c) and 2631(c) consolidates complaints filed by Companhia

Brasileira Carbureto de Cálcio ("CBCC") and Eletrosilex S/A, CIT

No. 01-00082, and by Elkem Metals Company and Globe Metallurgical

Inc., CIT No. 01-00098, each praying for relief from Silicon Metal

From Brazil; Final Results of Antidumping Duty Administrative Re-

view and Determination Not To Revoke in Part, 66 Fed.Reg. 11,256

(Feb. 23, 2001), promulgated by the International Trade Administra-

tion, U.S. Department of Commerce ("ITA").3    In pertinent part,

those Final Results were weighted average antidumping-duty margins

of 0.63 percent for CBCC and 93.20 percent for Eletrosilex.   See 66

Fed.Reg. at 11,257.    The former led to the following reported

rationale:

          After review of the record, the Department deter-
     mines that although CBCC has had zero or de minimis
     dumping margins for the previous two review periods,
     during the current review CBCC's weight-averaged dumping
     margin is determined to be 0.63 percent, above the de
     minimis rate . . . 0.50 percent . . .. Consequently,
     CBCC has not made sales of subject merchandise "at not
     less than NV for a period of at least three consecutive
     years" as required by the Department's regulations.
     Because one of the requirements to qualify for revocation
     has not been met, . . . we determine not to revoke this
     order with respect to CBCC.


     3
       The above-encaptioned plaintiffs ("Elkem & Globe") were
granted leave to intervene as parties defendant in the first
matter, from which resultant adverse posture they interposed a
motion to dismiss Eletrosilex as a party with any actionable claim,
alleging lack of standing. That motion has been denied per the
court's slip opinion 02-34, 26 CIT    , 196 F.Supp.2d 1367 (2002),
familiarity with which is presumed.
Consolidated
Court No. 01-00098                                           Page 3


Id. at 11,256-57.    The notice of the Final Results adopts the

ITA's Issues and Decision Memorandum for discussion of the points

pressed by the parties, including Eletrosilex.   See id. at 11,256.

That memorandum explains the margin for this exporter, in part, as

follows:


          Eletrosilex, an experienced participant in the
     antidumping proceedings since the 1991-1992 POR[] was on
     notice as provided by the Department's past practice that
     if it failed to act to the best of its ability, and the
     Department applied adverse FA, the rate selected could
     very well be the highest calculated rate in the proceed-
     ing, i.e., the 93.20 percent rate obtained in the LTFV
     investigation.    In determining the FA rate here, the
     Department considered the fact that, in the 1993-1994 and
     1994-1995 PORs, [it] calculated dumping margins of 61.58
     percent for CBCC and 81.61 percent for RIMA, respec-
     tively, while at the same time, calculating zero or
     single digit rates for other respondents, demonstrating
     that in this particular market, some companies may
     continue to dump at substantial margins while others have
     eliminated or substantially lowered their margins. The
     fact that these disparate rates have continued throughout
     the reviews since the original LTFV investigation,
     combined with [] Eletrosilex's failure to respond to the
     request for information, supports our conclusion that the
     93.20 percent rate from the investigation remains
     reasonable and relevant. The Department's determination
     here is in accordance with [it]s policy of selecting the
     highest calculated rate in the entire proceeding in order
     to induce future cooperation of a respondent.4


                                 I

           The plaintiffs Elkem & Globe have interposed a motion for

judgment upon the ITA record pursuant to USCIT Rule 56.2.   The sole

     4
      Appendix 8 to Brief in Opposition to Plaintiff Eletrosilex's
Motion for Judgment Upon the Agency Record, p. 15. The references
"POR", "FA", "LTFV", and "RIMA" are abbreviations for "period of
review", "facts available", "less than fair value", and for the
respondent "Rima Industrial S.A.", respectively.
Consolidated
Court No. 01-00098                                                       Page 4


thrust of the motion is that the agency failed to fulfill its

statutory obligation of calculating the cost of production ("COP")

and constructed value ("CV") based on the actual costs incurred by

the    producer   or   exporter   under   investigation,   which       failure,

according to them, has given rise to the issue of

       whether the Department erred in calculating the financial
       expenses included in COP and CV for CBCC, the producer
       and exporter of the subject merchandise, based on the
       financial statements of its indirect Belgian parent,
       Solvay & Cie, when the actual financial costs incurred by
       CBCC greatly exceeded the financial costs calculated by
       the Department.


Plaintiffs' Brief, p. 2.


             The defendant and CBCC each accept this as the issue

between them and the plaintiffs for resolution. See Defendant's

Memorandum, p. 2; Defendant-Intervenor's Brief in Opposition, p. 1.

And each defends the ITA's approach on the basis of existing agency

practice and case law. Their papers, understandably, cite and dis-

cuss the litigation sub nom. American Silicon Technologies v.

United States, CIT No. 97-02-00267, one of a series of suits

contesting the final results of ITA administrative reviews of the

same antidumping-duty order.        The action bearing that CIT docket

number entails judicial review of the ITA's reliance, in re CBCC,

on    the   consolidated   financial   statements   of   Solvay    &    Cie   of

Belgium, not Brazil.       See, e.g., American Silicon Technologies v.

United States, 23 CIT 237, 244-45 (1999). That opinion rejected as
Consolidated
Court No. 01-00098                                           Page 5


without merit the agency's claimed established practice of using

such consolidated statements of a respondent's parent corporation,

rather than those of the respondent itself, whenever the record

establishes, prima facie, parental corporate control.     The court

also was unable to find the requisite substantial evidence on the

record in support of that approach, whereupon it remanded

     the calculation of CBCC's financial expenses with the
     instruction that Commerce base those expenses upon the
     consolidated financial statements of CBCC and its im-
     mediate parent Solvay do Brasil.

Id. at 245.   The ITA complied with the court's order, and the

results of the remand on that issue were affirmed.     See American

Silicon Technologies v. United States, 25 CIT      ,     , Slip Op.

01-109, pp. 3-6 (Aug. 27, 2001).


          By the time of that affirmance, the actions comprising

this consolidated case had commenced, and, a few months later,

CBCC, a party to those prior proceedings, noticed a timely appeal

from that affirmance that has resulted in the following decision,

to quote from it in part:


     . . . [T]he trial court . . . remand . . . limited
     Commerce's examination to CBCC's transactions with
     Brasil.   This order prevented Commerce from further
     assessing the relationship between Brasil and Solvay or
     CBCC and Solvay. This limit on the remand methodology
     further inhibited Commerce's ability to ensure an
     accurate assessment of CBCC's financial costs.         As
     Commerce notes on appeal, during the remand proceedings,
     Commerce gathered more information about the relationship
     between CBCC and Brasil, but not with regard to the
     relationship between CBCC or Brasil and Solvay. Thus,
Consolidated
Court No. 01-00098                                          Page 6


     the record in the remand is deficient because Commerce
     could not compare the consolidated statements of Solvay
     with the consolidated statements of Brasil. By sharply
     limiting Commerce's inquiry, the trial court's remand
     actually prevented Commerce from undertaking a fully
     balanced examination that might have produced more
     accurate results.

          Therefore, this court reverses and remands with
     instructions to require Commerce to carry out its
     statutory duty of accurately assessing "general costs"
     . . ..

American Silicon Technologies v. United States, 334 F.3d 1033,

1038-39 (Fed.Cir.    2003).


          While the facts underlying that contested ITA administra-

tive review are still sub judice5, the issue posited above by the

plaintiffs Elkem & Globe in this case has been resolved as a matter

of law by the court of appeals adversely to their position, viz.:


          As a legal matter, the Court of International Trade
     had an obligation to defer to Commerce's reasonable
     methodology in the first place, but no such deference was
     afforded. Thus, according proper deference, Koyo Seiko
     Co. v. United States, 36 F.3d 1565, 1570, 1575 (Fed.Cir.
     1994), this court sustains as reasonable Commerce's well
     established practice of basing interest expenses and in-
     come on fully consolidated financial statements.


Id. at 1038.    Hence, plaintiffs' motion for judgment upon the

agency record must be, and it hereby is, denied.


     5
       This court notes in passing that, pursuant to the order
of remand, American Silicon Technologies v. United States, 27 CIT
    , Slip Op. 03-109 (Aug. 25, 2003), the ITA has filed its
determination of 0.37 percent as the weighted-average margin for
CBCC for the particular period of review at issue. See Silicon
Metal from Brazil: Final Results of Redetermination Pursuant to
Court Remand, p. 6 (Dec. 15, 2003).
Consolidated
Court No. 01-00098                                           Page 7


                                 II

           The motion of CBCC and Eletrosilex for such a judgment on

their behalf propounds the following issues for the court's adjud-

ication:


          1. Whether . . . Commerce's selection of the sur-
     rogate interest rate to calculate CBCC's imputed credit
     expense was supported by substantial evidence on the
     record and otherwise in accordance with law.

          2. Whether . . . Commerce's rejection of the in-
     terest rate based on CBCC's borrowing experience was sup-
     ported by substantial evidence on the record and other-
     wise in accordance with law.

          3. Whether the Department's use of adverse inference
     in applying total fact[s] available to Eletrosilex was
     supported by substantial evidence on the record and
     otherwise in accordance with law.

          4. Whether the Department properly corroborated the
     total facts available applied to Eletrosilex as total
     facts available, in accordance with law.


                                 A

           On its part, the defendant would compress the first two

of these enumerated issues into one, namely, whether the ITA prop-

erly calculated CBCC's home-market imputed credit expense based

upon an established Brazilian commercial reference rate rather than

a higher rate based upon a CBCC loan that was due after only

several days.    Defendant's Memorandum, p. 3.     This formulation

apparently has been derived from that part of the controlling

Decision Memorandum that sets forth the ITA's determination to use

Brazil's Taxa Referencial ("TR") rate to calculate CBCC's imputed
Consolidated
Court No. 01-00098                                                     Page 8


home-market credit costs.6       Be that as it may, defendant's counsel

eschew any defense now on this issue, requesting instead a remand

to the ITA for reconsideration and to give this determination "full

and fair consideration under the applicable law."          Id. at 2.


          CBCC welcomes this request, while the plaintiffs take the

position that the TR is an appropriate surrogate rate for calculat-

ing Brazilian home-market credit expenses when a respondent does

not have short-term borrowings during the period under review. See

Plaintiffs' Brief in Opposition to Defendant-Intervenor's Motion

for Judgment passim.


          Having    perused     and   carefully   considered   that    entire

brief, the court nonetheless concludes that defendant's remand re-

quest should be granted, in part in the light of the ITA's Silicon

Metal from Brazil; Final Results of Antidumping Duty Administrative

Review, 67 Fed.Reg. 6,488 (Feb. 12, 2002), which was published just

prior to that and the other briefs at bar and in which the

accompanying Issues and Decision Memorandum found that the TR is

"the index for savings accounts" and therefore concluded that it

was "not reasonable to use the TR rate as a surrogate interest rate

for short-term     commercial    borrowings".     A-351-806,   ARP    7/1/99-

6/30/00 (Feb. 12, 2002) (Comment 1), available at http://ia.ita.-

doc.gov/frn/summary/2002feb.htm.


     6
        See Appendix 8 to Brief in Opposition to Plaintiff
Eletrosilex's Motion for Judgment Upon the Agency Record, p. 19.
Consolidated
Court No. 01-00098                                             Page 9


                                   B

             Given the protracted and continuing administrative and

judicial proceedings centered on the ITA's antidumping-duty order

governing imports into the United States of silicon metal from

Brazil and its administrative reviews thereof, the adverse infer-

ences spelled out by Congress in 19 U.S.C. §1677e(b) and drawn by

the agency and the courts upon failure to provide information

within the meaning of section 1677e(a) surely have been, and

continue to be, well-understood by all the parties there- and here-

to.   Indeed, experienced counsel do not claim otherwise.


             All that is claimed by the government herein is that

"Eletrosilex chose not to respond to the Department's      . . . sup-

plemental questionnaire".7     However, as discussed in Mannesmann-

rohren-Werke AG v. United States, 23 CIT 826, 842, 77 F.Supp.2d

1302, 1316 (1999), for example,

      failing to respond does not have to be read negatively.
      A respondent can fail to respond because it was not able
      to obtain the requested information, did not properly
      understand the question asked, or simply overlooked a
      particular request. Thus, without further explanation by
      Commerce, the Court will not infer that a respondent's
      failure to respond constitutes substantial evidence that
      it failed to cooperate to the best of its ability.


That is, the agency must "articulate why it concluded that a party

failed to act to the best of its ability, and explain why the

absence of th[at] information is of significance to the progress of

      7
          Id. at 12 (emphasis added).   See Defendant's Memorandum, p.
36.
Consolidated
Court No. 01-00098                                           Page 10


its investigation".    23 CIT at 839, 77 F.Supp.2d at 1313-14.    See

Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382-83 (Fed.

Cir. 2003).


            Upon reading the ITA's reported reasoning8 and reviewing

the record filed herein, such as it is, the court cannot concur

that the supplemental information requested was "critical"9.     To be

sure, the agency's responsibility of prescribing mathematical mar-

gins of dumping is always a most daunting task.   But, as indicated,

this consolidated case is not proceeding on an empty slate.       For

example, in American Silicon Technologies v. United States, 24 CIT

612, 624, 110 F.Supp.2d 992, 1002 (2000), both the ITA and the

court seemingly recognized "Eletrosilex's history of compliance".

See, e.g., Silicon Metal From Brazil: Preliminary Results of Anti-

dumping Duty Administrative Review, 63 Fed.Reg. 42,001, 42,007

(Aug. 6, 1998):

     . . . In the past, Eletrosilex has demonstrated an
     understanding for requests of additional information by
     the Department.

In fact, that history led the court to opine that it actually

supports the claim that Eletrosilex was unable to respond to the

no-less-than-three supplemental agency requests for information at

issue.    See 24 CIT at 624, 110 F.Supp.2d at 1002.   That is,

     it does not follow that simply because Eletrosilex was
     able to respond to prior questionnaires it was able to

     8
         See supra, note 6, pp. 11-15.
     9
         Id. at 13.
Consolidated
Court No. 01-00098                                         Page 11


     respond to the . . . questionnaires at issue here . . .
     when viewed in light of Eletrosilex's notification to
     Commerce that "it is undergoing top to bottom management
     reviews, and because of changes in staffing, it is not
     able to respond in a timely manner".10

In sum, the court concluded:

          Commerce has not made the necessary finding that
     Eletrosilex failed to respond to the best of its ability.
     After reviewing Commerce's reasoning, the Court con-
     cludes that the primary basis for its determination was
     the mere fact that Eletrosilex failed to respond to the
     two supplemental questionnaires. As previously noted in
     Borden[, Inc. v. United States, 22 CIT 233, 4 F.Supp.2d
     1221 (1998),] and Mannesmannrohren-Werke, supra, this is
     only a recitation of the standard for the application of
     facts available under 19 U.S.C. § 1677e(a)(2)(B) and is
     inadequate justification for making an adverse inference
     pursuant to 19 U.S.C. § 1677e(b). Accordingly, the Court
     remands this issue for reconsideration and instructs
     Commerce to reopen the administrative record and collect
     additional evidence concerning Eletrosilex's claimed in-
     ability to respond to the supplemental questionnaires.


24 CIT at 625, 110 F.Supp.2d at 1003 (emphasis in original).


          After this remand (and commencement of this consolidated

case), the court was able to find substantial evidence developed on

the record in support of the ITA's approach:

     10
       24 CIT at 624, 110 F.Supp.2d at 1002 (emphasis in original).
The excuses proffered by Eletrosilex herein are not dissimilar.
See, e.g., Brief in Support of [CBCC & Eletrosilex] Plaintiffs'
Rule 56.2 Motion, p. 31.

     On their part, the gist of Elkem & Globe's motion to dismiss
Eletrosilex from this consolidated case for lack of standing was
that it

     no longer manufactures, produces or exports silicon
     metal. Thus, pursuant to the plain language of . . . 19
     U.S.C. § 1516a . . ., Eletrosilex is not an interested
     party and cannot participate in this appeal, as a matter
     of law.
Consolidated
Court No. 01-00098                                         Page 12


     . . . [T]he reason Eletrosilex could not answer Com-
     merce's supplemental questionnaires was because it
     dedicated the personnel capable of answering those
     questions to preparing information requested by Eletrosi-
     lex's potential purchaser. . . . The record shows that
     Eletrosilex decided to suspend certain operations,
     including participation in antidumping proceedings,
     during the period in question in order to curtail costs
     in anticipation of the sale of the company. . . . While
     Eletrosilex was facing bankruptcy during the period in
     question, the fact remains that it allocated its re-
     sources toward satisfying the requests of the prospective
     purchaser rather than Commerce.

American Silicon Technologies v. United States, 26 CIT      ,       ,

240 F.Supp.2d 1306, 1311 (2002).

                                   C

          Given this overlap of cases and related claims, the

question arises as to whether or not this court can assume similar

results of any remand on the issue of Eletrosilex's ability to have

provided the requested supplemental information to the ITA.      Pre-

suming it can, the related question remains whether the 93.20

percent margin sought to be imposed is "relevant, and not outdated,

or lacking a rational relationship".   Ferro Union, Inc. v. United

States, 23 CIT 178, 205, 44 F.Supp.2d 1310, 1335 (1999).      Stated

another way, an adverse-facts-available rate should be "a reason-

ably accurate estimate of the respondent's actual rate, albeit with

some built-in increase intended as a deterrent to non-compliance."

F.lli De Cecco di Filippo Fara S. Martino S.p.A. v. United States,

216 F.3d 1027, 1032 (Fed.Cir. 2000).    Accord: Ta Chen Stainless

Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1340 (Fed.Cir.

2002).
Consolidated
Court No. 01-00098                                                  Page 13


          The court's slip opinion 02-123 in American Silicon

Technologies points out that the actual margins calculated for

Eletrosilex in other ITA administrative reviews fluctuated between

18.87 and 51.84 percent. Also, the

     highest calculated rates for the first through fifth
     administrative reviews were 53.63 percent, 51.84 percent,
     61.58 percent, 67.93 percent, and 39.00 percent respec-
     tively. . . . The Court also finds it significant that
     the period of review in question began six years after
     the Less Than Fair Value Investigation in which the 93.20
     percent margin was calculated. This fact along with the
     fact that this margin is 25.27 percent higher than the
     highest margin calculated based on actual information in
     the intervening administrative reviews (i.e. the 67.93
     percent margin calculated in the fourth administrative
     review) leads the Court to conclude that the 93.20
     percent margin is inconsistent with actual commercial
     practices at and around the time in question . . . [and]
     is so far removed from being "a reasonably accurate
     estimate of the respondent's actual rate" that it is
     disproportionately punitive in nature.11


Whereupon that matter was remanded a second time to the ITA, which

thereafter duly reported a revised rate of 67.93 percent that has

been affirmed by the court, American Silicon Technologies v. United

States, 27 CIT       , 273 F.Supp.2d 1342 (2003).


                                     III


          While   the   court   in   that   case   has   since   stayed   the

judgment of affirmance therein


     11
       26 CIT at      , 240 F.Supp.2d at 1213-14. Cf. Reply of
Plaintiffs [CBCC & Eletrosilex] in Support of Their Motion for
Judgment Upon the Agency Record, pp. 6-8.
Consolidated
Court No. 01-00098                                            Page 14


       pending the final determination of the dumping margins in
       the fourth administrative review of the antidumping duty
       order on silicon metal from Brazil, sub nom. American
       Silicon Technologies v. United States, Consolidated Court
       No. 97-02-00267[,12]

this court hereby grants the USCIT Rule 56.2 motion of CBCC and

Eletrosilex13 to the extent of remand now to the defendant of this

consolidated case to impute anew (1) CBCC's home-market credit

costs and (2) Eletrosilex's margin of dumping for the period of

review implicated that is in accordance with law and supported by

substantial evidence on the record.


              Should this remand at this time not be in the interests

of advancement of all of the existing, related Brazilian silicon

metal matters to final resolution, the parties to this particular

consolidated case may confer and propose to this court a mutually-

more-desirable schedule. Otherwise, the defendant may have 45 days

herefrom within which to carry out this remand and to report the

results thereof to the court and the other parties, which may then

comment thereon within 30 days of receipt thereof.

              So ordered.

Decided:      New York, New York
              April 15, 2004

                                   Thomas J. Aquilino, Jr.
                                                 Judge


       12
            American Silicon Technologies v. United States, 27 CIT
   ,         , Slip Op. 03-144, p. 2 (Oct. 30, 2003).
       13
       The quality of the papers filed in support of and opposition
to this motion and the motion of the plaintiffs obviated any need
to grant their joint motion for oral argument.
