                         Slip Op. 00-82

           UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
                                    :
FAG ITALIA S.p.A. and FAG BEARINGS :
CORPORATION; SKF USA INC. and       :
SKF INDUSTRIE S.p.A.,               :
                                    :
          Plaintiffs and            :
          Defendant-Intervenors,    :
                                    :
          v.                        :   Consol. Court No.
                                    :   97-11-01984
UNITED STATES,                      :
                                    :
          Defendant,                :
                                    :
          and                       :
                                    :
THE TORRINGTON COMPANY,             :
                                    :
          Defendant-Intervenor      :
          and Plaintiff.            :
___________________________________:

     Plaintiffs and defendant-intervenors, FAG Italia S.p.A. and
FAG Bearings Corporation (collectively “FAG”), move pursuant to
USCIT R. 56.2 for judgment upon the agency record challenging
various aspects of the United States Department of Commerce,
International    Trade   Administration’s     (“Commerce”)   final
determination, entitled Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof From France, Germany, Italy,
Japan, Romania, Singapore, Sweden and the United Kingdom; Final
Results of Antidumping Duty Administrative Reviews (“Final
Results”), 62 Fed. Reg. 54,043 (Oct. 17, 1997), as amended,
Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof From France, Germany, Italy, Japan, Romania,
Singapore, Sweden and the United Kingdom; Amended Final Results of
Antidumping Duty Administrative Reviews, 62 Fed. Reg. 61,963 (Nov.
20, 1997). Plaintiffs and defendant-intervenors, SKF USA Inc. and
SKF Industrie S.p.A. (collectively “SKF”), as well as defendant-
intervenor and plaintiff, The Torrington Company (“Torrington”),
also move pursuant to USCIT R. 56.2 for judgment upon the agency
record challenging Commerce’s Final Results.

     Specifically, FAG claims that Commerce erred in: (1)
calculating profit for constructed value (“CV”); (2) failing to
Consol. Court No. 97-11-01984                               Page 2


match United States sales to “similar” home market sales prior to
resorting to CV when all home market sales of identical merchandise
have been disregarded; and (3) conducting a duty absorption inquiry
for the subject review.

     SKF claims that Commerce erred in: (1) conducting a duty
absorption investigation for the subject review; and (2)
calculating CV profit.

     Torrington claims that Commerce should have required SKF to
report air and ocean freight expenses on a transaction-specific
basis.

     Held: FAG’s USCIT R. 56.2 motion is granted in part and denied
in part. SKF’s USCIT R. 56.2 motion is granted in part and denied
in part. Torrington’s USCIT R. 56.2 motion is denied. This case
is remanded to Commerce to: (1) match United States sales to
similar home market sales before resorting to CV; and (2) annul all
findings and conclusions made pursuant to the duty absorption
inquiry conducted for this review. Commerce is affirmed in all
other respects.

[FAG’s motion is granted in part and denied in part. SKF’s motion
is granted in part and denied in part.     Torrington’s motion is
denied. Case remanded.]

                                              Dated: July 13, 2000

     Grunfeld, Desiderio, Lebowitz & Silverman LLP (Max         F.
Schutzman, Andrew B. Schroth and Mark E. Pardo) for FAG.

     Steptoe & Johnson LLP (Herbert C. Shelley, Alice A. Kipel and
Anne Talbot) for SKF.

     David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Velta A. Melnbrencis,
Assistant Director); of counsel: Mark A. Barnett, Stacy J.
Ettinger, Myles S. Getlan and David R. Mason, Office of the Chief
Counsel for Import Administration, United States Department of
Commerce, for the United States.

     Stewart and Stewart (Terence P. Stewart, Wesley K. Caine,
Geert De Prest and Lane S. Hurewitz) for Torrington.
Consol. Court No. 97-11-01984                                                Page 3


                                         OPINION

       TSOUCALAS,        Senior    Judge:          Plaintiffs    and      defendant-

intervenors,      FAG     Italia    S.p.A.    and    FAG   Bearings    Corporation

(collectively “FAG”), move pursuant to USCIT R. 56.2 for judgment

upon    the     agency    record    challenging      various     aspects    of   the

Department       of   Commerce,     International      Trade     Administration’s

(“Commerce”) final determination, entitled Antifriction Bearings

(Other Than Tapered Roller Bearings) and Parts Thereof From France,

Germany, Italy, Japan, Romania, Singapore, Sweden and the United

Kingdom; Final Results of Antidumping Duty Administrative Reviews

(“Final Results”), 62 Fed. Reg. 54,043 (Oct. 17, 1997), as amended,

Antifriction Bearings (Other Than Tapered Roller Bearings) and

Parts     Thereof     From     France,    Germany,    Italy,     Japan,    Romania,

Singapore, Sweden and the United Kingdom; Amended Final Results of

Antidumping Duty Administrative Reviews (“Amended Final Results”),

62 Fed. Reg. 61,963            (Nov. 20, 1997).      Plaintiffs and defendant-

intervenors, SKF USA Inc. and SKF Industrie S.p.A. (collectively

“SKF”),    as    well     as    defendant-intervenor       and   plaintiff,      The

Torrington Company (“Torrington”), also move pursuant to USCIT R.

56.2 for judgment upon the agency record challenging Commerce’s

Final Results.


       Specifically,         FAG   claims    that    Commerce    erred     in:   (1)

calculating profit for constructed value (“CV”); (2) failing to
Consol. Court No. 97-11-01984                                           Page 4


match United States sales to “similar” home market sales prior to

resorting to CV when all home market sales of identical merchandise

have been disregarded; and (3) conducting a duty absorption inquiry

for the subject review.


        SKF claims that Commerce erred in: (1) conducting a duty

absorption        investigation   for   the    subject   review;    and   (2)

calculating CV profit.


        Torrington claims that Commerce should have required SKF to

report air and ocean freight expenses on a transaction-specific

basis.



                                  BACKGROUND

        This case concerns the seventh review of the antidumping duty

order on antifriction bearings (other than tapered roller bearings)

and parts thereof (“AFBs”) imported to the United States during the

review period of May 1, 1995 through April 30, 1996.1               Commerce

published the preliminary results of the subject review on June 10,

1997.       See   Antifriction    Bearings    (Other   Than   Tapered   Roller



        1
      Since the administrative review at issue was initiated after
December 31, 1994, the applicable law is the antidumping statute as
amended by the Uruguay Round Agreements Act (“URAA”), Pub. L. No.
103-465, 108 Stat. 4809 (1994) (effective January 1, 1995). See
Torrington Co. v. United States, 68 F.3d 1347, 1352 (Fed. Cir.
1995) (citing URAA § 291(a)(2), (b) (noting effective date of URAA
amendments)).
Consol. Court No. 97-11-01984                               Page 5


Bearings) and Parts Thereof From France, Germany, Italy, Japan,

Romania, Singapore, Sweden and the United Kingdom; Preliminary

Results of Antidumping Duty Administrative Reviews and Partial

Termination of Administrative Reviews (“Preliminary Results”), 62

Fed. Reg. 31,566. Commerce issued the Final Results on October 17,

1997 and amended them on November 20, 1997.   See Final Results, 62

Fed. Reg. at 54,043; Amended Final Results, 62 Fed. Reg. at 61,963.



                           JURISDICTION

     The Court has jurisdiction over this matter pursuant to 19

U.S.C. § 1516a(a) (1994) and 28 U.S.C. § 1581(c) (1994).



                        STANDARD OF REVIEW

     The Court will uphold Commerce’s final determination in an

antidumping administrative review unless it is “unsupported by

substantial evidence on the record, or otherwise not in accordance

with law.”   19 U.S.C. § 1516a(b)(1)(B)(i) (1994).



                            DISCUSSION

I.   Commerce’s CV Profit Calculation

     Commerce calculated an actual profit ratio for FAG and SKF.

First, Commerce subtracted costs and expenses from the home market

price in order to calculate the profit for each sale of the foreign

like product in the ordinary course of trade.        Commerce then
Consol. Court No. 97-11-01984                                   Page 6


aggregated the profit for all sales at the same level of trade

(“LOT”) and divided this profit by the exporter’s or producer’s

aggregate cost totals for the same sales.           See Def.’s Mem. in

Partial Opp’n to Pls.’ Mots. J. Agency R. (“Def.’s Mem.”) at 11-12

(citing Preliminary Results, 62 Fed. Reg. at 31,571).



      A.     Contentions of the Parties

      FAG contends that Commerce acted contrary to the plain meaning

of 19 U.S.C. § 1677b(e)(2)(A) (1994) in calculating CV profit on an

aggregated “class or kind” basis while disregarding sales outside

the ordinary course of trade.    See FAG’s Mot. J. Agency R. at 2, 4-

11.   FAG maintains that the statute permits Commerce to use an

aggregated CV profit calculation only if no below-cost sales are

disregarded in the calculation.           See id.   SKF makes similar

arguments.    See SKF’s Mot. J. Agency R. at 38-57.


      Commerce maintains that it applied a reasonable interpretation

of § 1677b(e)(2)(A) and properly based CV profit on aggregate

profit data of all foreign like products under consideration for

normal value (“NV”) while disregarding below-cost sales.           See

Def.’s Mem. at 7-20.     Torrington generally agrees with Commerce.

See Torrington’s Resp. to FAG’s and SKF’s Mots. J. Agency R.

(“Torrington’s Resp.”) at 12-15.
Consol. Court No. 97-11-01984                                                 Page 7


       B.        Analysis

       In RHP Bearings Ltd. v. United States, 23 CIT ___, 83 F. Supp.

2d 1322 (1999), this Court held, inter alia, that Commerce’s CV

profit methodology, which consists of using the aggregate data of

all foreign like products under consideration for NV, is consistent

with the antidumping statute.            Since FAG’s and SKF’s arguments and

the methodology at issue in this case are practically identical to

those presented in RHP Bearings, the Court adheres to its reasoning

in    RHP    Bearings       and,   therefore,   finds   Commerce’s       CV   profit

methodology to be in accordance with law.               Furthermore, since the

methodology in § 1677b(e)(2)(A) explicitly requires that only sales

“in the ordinary course of trade” be included in the calculation,

and below-cost sales that were disregarded in determining NV are

not part of the “ordinary course of trade,” the exclusion of below-

cost sales was appropriate.              See 19 U.S.C. §§ 1677(15) (1994),

1677b(b)(1).



II.    Commerce’s Matching United States Sales to “Similar” Home
       Market Sales Prior to Resorting to Constructed Value

       FAG maintains that Commerce erred in resorting to CV without

first attempting to match United States sales-–export price (“EP”)

or constructed export price (“CEP”) sales--to “similar” home market

sales       in   instances    where   all   home   market   sales   of   identical

merchandise have been disregarded because they were out of the
Consol. Court No. 97-11-01984                                  Page 8


ordinary course of trade.   See FAG’s Mot. J. Agency R. at 2, 11-12.

FAG maintains that a remand is necessary to bring Commerce’s

practice in line with the United States Court of Appeals for the

Federal Circuit’s (“CAFC”) decision in Cemex, S.A. v. United

States, 133 F.3d 897, 904 (Fed. Cir. 1998).     Commerce agrees with

FAG.   See Def.’s Mem. at 21.


       The Court agrees with the parties.       In Cemex, the CAFC

reversed Commerce’s practice of matching a United States sale to CV

when the identical or most similar home market model failed the

cost test.   See 133 F.3d at 904.   The CAFC stated that “[t]he plain

language of the statute requires Commerce to base foreign market

value [(now NV)] on nonidentical but similar merchandise [(foreign

like product under post-URAA law)] . . . rather than [CV] when

sales of identical merchandise have been found to be outside the

ordinary course of trade.”      Cemex, 133 F.3d at 904.   In light of

the CAFC’s decision in Cemex, this matter is remanded so that

Commerce can first attempt to match United States sales to similar

home market sales before resorting to CV.



III. Commerce’s Duty Absorption Inquiry

       Title 19, United States Code, § 1675(a)(4) (1994) provides

that during an administrative review initiated two or four years

after the “publication” of an antidumping duty order, Commerce, if
Consol. Court No. 97-11-01984                                          Page 9


requested by a domestic interested party, “shall determine whether

antidumping duties have been absorbed by a foreign producer or

exporter subject to the order if the subject merchandise is sold in

the United States through an importer who is affiliated with such

foreign    producer    or   exporter.”2      Section   1675(a)(4)   further

provides   that   Commerce    shall   notify    the    International   Trade

Commission (“ITC”) of its findings regarding such duty absorption

for the ITC to consider in conducting a five-year (“sunset”) review

under § 1675(c), and the ITC will take such findings into account

in determining whether material injury is likely to continue or

recur if an order were revoked under § 1675(c).            See 19 U.S.C. §

1675a(a)(1)(D) (1994).


     On May 31, 1996 and July 9, 1996, Torrington requested that

Commerce conduct a duty absorption inquiry pursuant to § 1675(a)(4)

with respect to various respondents, including FAG and SKF, to

determine whether antidumping duties had been absorbed during the

seventh review.       See Final Results, 62 Fed. Reg. at 54,075.


     In the Final Results, Commerce found that duty absorption had

occurred for the subject review.          See id. at 54,044.   In asserting

authority to conduct a duty absorption inquiry under § 1675(a)(4),



     2
       Subsection (a)(4) of 19 U.S.C. § 1675 was added to the
antidumping law by the URAA in 1994. See Pub. L. No. 103-465, §
220, 108 Stat. 4809, 4860.
Consol. Court No. 97-11-01984                                        Page 10


Commerce first explained that for “transition orders,” as defined

in § 1675(c)(6)(C) (that is, antidumping duty orders, inter alia,

deemed     issued   on   January   1,   1995),   regulation   19   C.F.R.   §

351.213(j)(2)3 provides that Commerce “will make a duty-absorption

determination,      if   requested,     for   any   administrative   review

initiated in 1996 or 1998.”        Id. at 54,074 (citing 19 CFR Part 351

et al., Antidumping Duties; Countervailing Duties; Final [R]ule, 62

Fed. Reg. 27,296, 27,394 (May 19, 1997)). Commerce also noted that

although the regulation did not bind it for this seventh AFB

review, it constitutes a public statement of how Commerce construes



      3
          The full text of 19 C.F.R. § 351.213(j) (1997) provides:

      (j) Absorption of antidumping duties.

        (1) During any administrative review covering all or
      part of a period falling between the first and second or
      third and fourth anniversary of the publication of an
      antidumping order under § 351.211, or a determination
      under § 351.218(d) (sunset review), the Secretary, if
      requested by a domestic interested party within 30 days
      of the date of publication of the notice of initiation of
      the review, will determine whether antidumping duties
      have been absorbed by an exporter or producer subject to
      the review if the subject merchandise is sold in the
      United States through an importer that is affiliated with
      such exporter or producer. The request must include the
      name(s) of the exporter or producer for which the inquiry
      is requested.

        (2) For transition orders defined in section 751(c)(6)
      of the Act, the Secretary will apply paragraph (j)(1) of
      this section to any administrative review initiated in
      1996 or 1998.

Id.
Consol. Court No. 97-11-01984                                       Page 11


§ 1675(a)(4).4     See id.     Commerce concluded that (1) because the

antidumping duty order on the AFBs in this case has been in effect

since    1989,   the   order   is   a   transition   order   pursuant   to   §

1675(c)(6)(C), and (2) since this review was initiated in 1996 and

a request was made, Commerce had the authority to make a duty

absorption inquiry for the seventh review.           See id. at 54,075.



     A.     Contentions of the Parties

     FAG and SKF argue that: (1) Commerce lacked authority under §

1675(a)(4) to conduct a duty absorption inquiry for the seventh

review of the 1989 antidumping duty orders; and (2) even if

Commerce possessed the authority to conduct such an inquiry,

Commerce’s methodology for determining duty absorption was contrary

to law and, accordingly, the case should be remanded to Commerce to

reconsider its methodology.         See FAG’s Mot. J. Agency R. at 3, 12-

18; SKF’s Mot. J. Agency R. at 3, 9-38.


     Commerce argues it properly construed subsections (a) and (c)

of § 1675 as authorizing it to make duty absorption inquiries for


     4
      Although 19 C.F.R. § 351.213(j) is indicative of Commerce’s
interpretation of the URAA, the regulation does not apply here
because the administrative review in this case was initiated on
June 20, 1996 pursuant to a request dated May 31, 1996. Commerce’s
regulations that were issued pursuant to the URAA apply only to
“administrative reviews initiated on the basis of requests made on
or after the first day of July, 1997.” 19 CFR Part 351 et al.,
Antidumping Duties; Countervailing Duties; Final [R]ule, 62 Fed.
Reg. 27,296, 27,416-17 (May 19, 1997).
Consol. Court No. 97-11-01984                                                  Page 12


antidumping duty orders that were issued and published prior to

January 1, 1995.        See Def.’s Mem. at 21-30.              Commerce also asserts

that     it   devised     and   applied       a    reasonable      methodology    for

determining     duty     absorption.      See       id.   at    30-38.    Torrington

generally agrees with Commerce’s contentions.                      See Torrington’s

Resp. at 6-11.



       C.     Analysis

       In SKF USA Inc. v. United States, 24 CIT __, 94 F. Supp. 2d

1351 (2000), this Court determined that Commerce lacked statutory

authority under 19 U.S.C. § 1675(a)(4) to conduct a duty absorption

inquiry for antidumping duty orders issued prior to the January 1,

1995 effective date of the Uruguay Round Agreements Act (“URAA”),

Pub. L. No. 103-465, 108 Stat. 4809 (1994).                    See id. at ___, 94 F.

Supp. 2d at 1357-59.            The Court noted that Congress expressly

prescribed     in   the    URAA   that    §       1675(a)(4)      “must   be   applied

prospectively on or after January 1, 1995 for 19 U.S.C. § 1675

reviews.”      Id. at __, 94 F. Supp. 2d at 1359 (citing § 291 of the

URAA).


       Because the duty absorption inquiry, the methodology and the

parties’ arguments at issue in this case are practically identical

to those presented in SKF USA, the Court adheres to its reasoning

in SKF USA.     The Court, therefore, finds that Commerce did not have
Consol. Court No. 97-11-01984                                            Page 13


the statutory authority under § 1675(a)(4) to undertake a duty

absorption inquiry for the applicable pre-URAA antidumping duty

order in dispute here.



IV.       Ocean and Freight Expenses

          Title 19, United States Code, § 1677a(c)(2)(A) provides that

EP and CEP may be reduced to account for costs “incident to

bringing      the   subject   merchandise    from      the   original   place   of

shipment in the exporting country to the place of delivery in the

United States.”       Such expenses include ocean and freight costs.


          Although Commerce prefers transaction-specific reporting of

such costs in order to minimize distortion, Commerce accepts

reasonable allocations of such costs where transaction-specific

information is unavailable. Here, SKF did not report freight costs

on    a    transaction-specific   basis     and    instead    reported   average

freight cost based on weight.       See Torrington’s Ex. in Supp. of its

Mem. in Supp. of Mot. J. Agency R. (“Torrington’s Ex.”) 7, SKF

Section C Questionnaire Resp. at C-133 to 135.                    SKF devised an

international       freight   expense    rate     by   dividing    transatlantic

freight, foreign brokerage and handling, foreign inland freight and

United States inland freight for shipments during the sampled time

periods by the shipping weight of the merchandise during the

sampled time periods.          See id.      The reporting of the freight
Consol. Court No. 97-11-01984                                     Page 14


expenses was consistent with the manner in which these expenses

were incurred. See id. The international freight expense rate was

then applied to the per-unit shipping weight.            See id.     This

yielded   “the   reported   combined   international   freight,   foreign

brokerage, foreign inland freight and U.S. inland freight expenses

for the [period of review].”     Id.


      SKF’s method of calculating per-unit ocean and air freight was

verified by Commerce.       See Torrington’s Ex. 8, SKF Verification

Report at 4.      In the verification report, Commerce stated the

following:

      SKF calculated an international-freight rate by combining
      an air-freight rate and an ocean-freight rate.        The
      ocean-freight rate was derived from ocean freight
      expenses (consisting of inland transportation and ocean
      expense minus the weight and value for shipments to
      Canada) divided by ocean freight weight. The air-freight
      rate was derived from air expense divided by air-freight
      weight. The expenses and weights used were based on data
      from the same five sample months used by SKF in
      calculating this factor in prior reviews. We tied total
      value and total weight data on worksheets to freight
      invoices.   We verified the value and weight amounts
      subtracted for Canada by tracing data on freight invoices
      to detailed reports provided by freight carriers. The
      air and ocean rates were weighted by shipment weight so
      that the data reflected the proper ratio of air freight
      expense to total shipments and ocean-freight expense to
      total shipments. We noted that there were no customers
      listed on the air-freight invoices. As a further check
      on the accuracy of the methodology, we selected SKF
      France and tied worksheets to invoices and shipping
      reports. We found no discrepancies in the data that we
      reviewed.

Id.
Consol. Court No. 97-11-01984                                         Page 15


     In the Final Results, Commerce accepted SKF’s reported air and

ocean freight expenses.         See 62 Fed. Reg. at 54,081.          Commerce

“found that it is generally not feasible for [SKF] to report air

and ocean freight on a transaction-specific basis . . . [and,

therefore,] accepted aggregated international freight data” where

SKF was unable to report ocean and air freight separately.            Id.   In

response to Torrington’s claim that SKF’s methodology could result

in the distortion of freight costs, Commerce stated that it found

no evidence that the methodology utilized by SKF actually distorted

reported    freight    costs.     See    id.    In    conclusion,    Commerce

determined that because it had found that SKF acted to the best of

its ability, “it would be improper to make adverse inferences about

[SKF’s] reported data by applying facts available simply because

[SKF’s] record-keeping system[] do[es] not record [its] data on a

transaction-specific basis.”       Id.



     A.     Contentions of the Parties

     Torrington contends that Commerce erred by accepting SKF’s

reporting of air and ocean freight expenses for EP sales on an

aggregate basis.      See Torrington’s Mem. in Supp. of Mot. J. Agency

R. at 2.     Torrington maintains that Commerce should have required

SKF to report expenses for EP sales on a transaction-specific basis

since     transaction-specific     records     of    international    freight

expenses for EP transactions were available.            See id.   Torrington
Consol. Court No. 97-11-01984                                           Page 16


also contends that this Court’s approval of Commerce’s acceptance

of aggregated international freight data in Torrington v. United

States (“Torrington I”), 21 CIT 491, 965 F. Supp. 40 (1997),

applies only to CEP sales and, therefore, Commerce should have

demanded more specific reporting for the EP sales involved in the

instant case. See id. at 9-10. Specifically, Torrington contends

that     “[u]nlike    CEP      transactions,    EP    transactions      involve

merchandise shipped directly from the foreign producer to the U.S.

customer . . . [and, therefore,] transaction-specific records (or

at     least   records   for    particular     groups    of    sales)   for    EP

transactions are generated and maintained by the producer in the

ordinary course of business.”         Id. at 12.     Torrington argues for a

distinction in the treatment of EP versus CEP sales for the first

time in its submissions to this Court.             Additionally, Torrington

complains that because “SKF aggregated its separate air and ocean

freight    factor    calculations    for   purposes     of    reporting,”     this

resulted in distortion because air freight is approximately four

times more expensive than ocean freight.             Id. at 12-14.


       Commerce asks that the Court disregard Torrington’s argument

regarding the proposed distinction between EP and CEP sales since

it was not raised during the administrative review and, therefore,

Torrington failed to exhaust its administrative remedies.                     See

Def.’s Mem. at 44-45.          Commerce also maintains that this case is
Consol. Court No. 97-11-01984                                      Page 17


governed by Torrington I regardless of whether the sales involved

are EP or CEP sales.       See id. at 45-46.


     Commerce     argues    that   the   record   evidence   supports   its

conclusion that it was not “feasible for SKF to report air freight

expenses on a transaction-specific basis.”         Id. at 46.   Responding

to Torrington’s contention that the failure to allocate the more

expensive air freight on a transaction-specific basis “potentially”

overstates   United    States      sales,   Commerce   argues   that    its

verification of SKF’s reporting methodology demonstrated that the

reported allocated expenses fairly represented actual expenses.

See id. at 46-48.


     Like Commerce, SKF argues that Torrington has failed to

exhaust its administrative remedies with respect to its argument

about the proposed distinction between EP and CEP sales. See SKF’s

Resp. to Torrington’s Mot. J. Agency R. (“SKF’s Resp.”) at 8.


     SKF   also   contends    that    Commerce    properly   accepted   its

reported air and ocean freight expenses.          See id. at 11-12.     SKF

maintains that the freight expenses were reported in the same

manner in which they were incurred, that its methodology had been

verified and accepted in previous reviews and that the reporting

had been verified for the review at issue.          See id. at 12.
Consol. Court No. 97-11-01984                                               Page 18


      B.     Analysis

      SKF and Commerce are correct in contending that “[i]f there

exist    factual     or   legal    distinctions        rendering   SKF’s   freight

methodology for EP transactions unique, then Torrington should have

[raised] the EP freight expenses on the [administrative] record

below.”     SKF’s Resp. at 9.           Torrington, however, does not present

any factual or legal distinctions here to demonstrate that SKF’s

freight methodology, as applied to EP transactions, is unique. All

Torrington presents is the general contention that EP sales should

be treated differently because they are not “typical” and the

unsupported     contention        that     transaction-specific        records   are

maintained for such sales.              See Torrington’s Mot. J. Agency R. at

12.


      Because Torrington presents no persuasive reason why SKF’s

methodology is not equally applicable to EP sales, the Court finds

that this issue is identical to ones found in this Court’s previous

decisions in Torrington I, 21 CIT 491, 965 F. Supp. 40 (upholding

Commerce’s acceptance of reported allocated freight expenses where

methodology is reasonable and representative of the underlying

information, and Commerce verified information); Torrington Co. v.

United States (“Torrington II”), 21 CIT 686, 969 F. Supp. 1332

(1997)     (same),    aff’d,      156    F.3d   1361    (Fed.   Cir.    1998);   and

Torrington v. United States (“Torrington III”), 17 CIT 967, 832 F.
Consol. Court No. 97-11-01984                                            Page 19


Supp. 405 (1993) (same).5           In its previous decisions, this Court

had acknowledged Commerce’s authority under certain circumstances

to accept averages rather than transaction-specific data as long as

the methodology chosen by a respondent is reasonable and supported

by   information        contained   in   the   administrative   record.6    See

Torrington I, 21 CIT at 497, 965 F. Supp. at 45; Torrington II, 21

CIT at 694, 969 F. Supp. at 1339; Torrington III, 17 CIT at 972,

832 F. Supp. at 410.              The “key issue is that [Commerce] must

closely examine the proposed methodology and make a determination

that       it   is   reasonable   and    representative”   of   the   underlying

information.         Torrington III, 17 CIT at 972, 832 F. Supp. at 410.

In Torrington I, for example, this Court sustained Commerce’s

acceptance of respondent’s allocation of aggregated air and ocean


       5
       Torrington I, Torrington II and Torrington III were decided
under the law as it existed prior to the URAA amendments.      See
Torrington I, 21 CIT at 496-98, 965 F. Supp. at 44-46; Torrington
II, 21 CIT at 693-94, 969 F. Supp. at 1339; Torrington III, 17 CIT
at 970-72, 832 F. Supp. at 408-10. These cases, however, apply to
the instant case even though it is governed by post-URAA law.
There is no indication in the antidumping statute or the Statement
of Administrative Action (“SAA”) accompanying the statute that the
new law prohibits the reporting of 19 U.S.C. § 1677a(c)(2)(A)
transportation expenses on an aggregated or allocated basis. See
H.R. Doc. 103-316, at 823 (1994), reprinted in 1994 U.S.C.C.A.N.
4040.
       6
       Torrington acknowledges that this Court has already approved
of Commerce’s acceptance of aggregated international freight data
where a respondent could not report ocean and air freight
separately and, moreover, presents no reason why this Court should
depart from its previous holdings. See Torrington’s Mot. J. Agency
R. at 9-10.
Consol. Court No. 97-11-01984                                                 Page 20


freight expenses because Commerce had (1) determined that “it could

not link specific sales to specific shipments” and (2) “properly

verified     that      the   expenses     were    reasonably     allocated”,        thus

satisfying “its duty to investigate the methodology proposed by the

respondent        to    determine       whether     it    was    ‘reasonable        and

representative’” of the underlying information. 21 CIT at 498, 965

F. Supp. at 46.


      The Court adheres to its prior decisions in Torrington I,

Torrington     II      and   Torrington     III    and   finds    that    Commerce’s

determination was supported by substantial evidence and otherwise

in accordance with law.          Commerce verified that it could not link

specific sales to specific shipments.                    In particular, Commerce

found that there were “no customers listed on the air-freight

invoices.”        Torrington’s Ex. 8, SKF Verification Report at 4.

Commerce also verified that the expenses were reasonably allocated.

See   id.      Specifically,        Commerce      verified      the   accuracy      and

completeness of SKF’s reported aggregated freight expenses and

weights by “tracing data on freight invoices to detailed reports

provided by freight carriers.” Id. Commerce also weighted the air

and ocean rates “by shipment weight so that the data reflected the

proper ratio of air freight expense to total shipments and ocean-

freight expense to total shipments.” Id. Thus, Commerce satisfied

its   duty   to     investigate     the   methodology      proposed      by   SKF   and
Consol. Court No. 97-11-01984                                        Page 21


determined    that   it   was   reasonable    and   representative   of   the

underlying information.


     The Court has considered Torrington’s other contentions and

finds that they have no merit.       Commerce is sustained.



                                 CONCLUSION

     This case is remanded to Commerce to: (1) match United States

sales to similar home market sales before resorting to CV; and (2)

annul all findings and conclusions made pursuant to the duty

absorption inquiry conducted for this review. Commerce is affirmed

in all other respects.




                                             _________________________
                                                NICHOLAS TSOUCALAS
                                                   SENIOR JUDGE

Dated:       July 13, 2000
             New York, New York
