                       Slip Op. 00-17

        UNITED STATES COURT OF INTERNATIONAL TRADE

_________________________________
                                    :
THAI PINEAPPLE CANNING INDUSTRY     :
CORP., LTD., and MITSUBISHI         :
INTERNATIONAL CORP.,                :
                                    :
         Plaintiffs,                :   Court No. 98-03-00487
                                    :
               v.                   :
                                    :   Public Version
THE UNITED STATES,                  :
                                    :
         Defendant,                 :
                                    :
         and                        :
                                    :
MAUI PINEAPPLE CO., LTD., and       :
INTERNATIONAL LONGSHOREMEN’S AND    :
WAREHOUSEMEN’S UNION,               :
                                    :
          Defendant-Intervenors.    :
________________________________    :

[ITA remand results affirmed in part, reversed and remanded in
part.]

                                        Dated: February 10, 2000

     Dickstein Shapiro Morin & Oshinsky LLP (Arthur J. Lafave
III, Douglas N. Jacobson, and Patricia M. Steele) for
plaintiffs.

     David W. Ogden, Acting Assistant Attorney General,
David M. Cohen, Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice (Lucius B. Lau),
Christine E. Savage, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, of
counsel, for defendant.

     Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal
and David C. Smith, Jr.) for defendant-intervenors.
Court No. 98-03-00487                                  Page 2


                             OPINION

    RESTANI, Judge:     On May 5, 1999, the court remanded the

final results of the Department of Commerce, International

Trade Administration (“Commerce” or “the Department”) in

Canned Pineapple Fruit from Thailand, 63 Fed. Reg. 7,392

(Dep’t Commerce 1998) (final results of antidumping duty

admin. rev.) [hereinafter “Final Results”].    See Thai

Pineapple Canning Indus. Corp. v. United States, No. 98-03-

00487, 1999 WL 288772 (Ct. Int’l Trade May 5, 1999)

[hereinafter “Thai Pineapple”].1   The case concerned a

challenge by Thai Pineapple Canning Industry Corp., Ltd.

(“TPC”) and Mitsubishi International Corp. (“MIC”)

(collectively “TPC”) to the Department’s Final Results.     In

its remand instructions, the court instructed Commerce to (1)

reconsider the date of sale, (2) reconsider the matching of

costs to sales on a fiscal year basis for cost of production

(“COP”) and constructed value (“CV”) purposes, and (3)

recalculate the constructed export price (“CEP”) profit

calculation.   Thai Pineapple, 1999 WL 288772, at *11.    Because

neither TPC nor Commerce had an adequate opportunity to



    1  Familiarity with the court’s earlier opinion is
presumed.
Court No. 98-03-00487                                  Page 3


address the assessment rate of entries made after the final

determination in the original less-than-fair-value

investigation, that issue was remanded to provide the parties

a further opportunity to brief the issue.     Thai Pineapple,

1999 WL 288772, at *2.     The court upheld Commerce’s use of a

single assessment rate for the period of review (“POR”).        Id.

at *10-11.

     Commerce issued its remand determination on September 2,

1999.   See Final Results of Redetermination Pursuant to Court

Remand: Thai Pineapple Canning Industry Corp., Ltd., and

Mitsubishi International Corp. v. United States, Court No. 98-

03-00487 [hereinafter “Remand Results” or “RR”].

              Jurisdiction and Standard of Review

     The court has jurisdiction pursuant to 28 U.S.C. §

1581(c) (1994).     In reviewing final determinations in

antidumping duty investigations, the court will hold unlawful

those agency determinations which are unsupported by

substantial evidence on the record, or otherwise not in

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

I.   Date of Sale

A.   Background

     In the Final Results, Commerce used the date of contract

for purposes of determining the date of sale for export price
Court No. 98-03-00487                                 Page 4


(“EP”) sales and third country sales.    Final Results, 63 Fed.

Reg. at 7,394-95.    The court found that Commerce’s policy as

of the time of its review of TPC was to use invoice date for

date of sale, absent a significant reason to do the contrary.

See Thai Pineapple, 1999 WL 288772, at *5-6.    The court

therefore remanded for Commerce to state whether there was

“another reason for rejecting invoice date” and to “square its

reasoning with its other contemporaneous determinations.”         Id.

at *6.    In the Remand Results, Commerce reconsidered the date

of sale determination, and again concluded that “contract date

remains the appropriate date of sale for TPC’s third country

sales, based on the record in this case.”    RR, at 13.     The

Department states that this decision is consistent with its

date of sale methodology in contemporaneous determinations.

Id.

B.    Discussion

      TPC argues that Commerce has not provided an adequate

explanation for not utilizing invoice date as date of sale in

its remand determination.

      The Department announced a new policy, applicable to this

case, of using invoice date for date of sale unless there is

information indicating that date of contract should be used

because all material terms of the sale were firmly fixed at
Court No. 98-03-00487                                      Page 5


that time.     See Thai Pineapple, 1999 WL 288772, at *5.      This

policy is now reflected in Commerce’s regulations.2        19 C.F.R.

§ 351.401(i) (1999).

    The announced policy was not applied to this matter

although it was applied to other contemporaneous matters.           See

Thai Pineapple, 1999 WL 288772, at *6.      The new rule

establishes a presumption that invoice date will be the date

of sale.     See 19 C.F.R. § 351.401(i).   If Commerce can

establish “a different date [that] better reflects the date on

which the exporter or producer establishes the material terms

of sale,” Commerce may choose a different date.      Id.     Commerce

has cited nothing of substance which indicates sales terms

were fixed at an earlier date.     Nor has it cited any other

credible reason for disregarding its announced presumption.

See Antidumping Duties; Countervailing Duties - Final Rule, 62

Fed. Reg. 27,296, 27,349 (Dep’t Commerce 1997) (invoice date

presumption applies “absent satisfactory evidence that the



    2  Commerce at times states that the policy reflected its
then current practice. Thus, the court assumes its practice
had evolved over time. See also Antidumping Duties;
Countervailing Duties - Notice of Proposed Rulemaking and
Request for Public Comments, 61 Fed. Reg. 7,308, 7,330 (Dep’t
Commerce 1996) (“This is a change from prior practice under
which the Department based the date of sale on the date on
which the ‘essential terms of sale’ (normally price and
quantity) were established”).
Court No. 98-03-00487                                 Page 6


terms of sale were finally established on a different date.”)

Commerce does not cite industry practice or a lag between

invoice and shipment, or any other unusual situation,

indicating a date, other than invoice date should be used.

There appears to be no other case in which “rare instances” of

changes after contract date, RR, at 17, was considered

substantial reason to abandon the invoice date presumption.

Under the facts of this case, i.e., rising pineapple costs,

the fact that few purchasers sought changes is meaningless.

The question is could the terms be changed, or were they fixed

at the time of the initial order.    See Final Results, 63 Fed.

Reg. at 7,394.    The evidence is that the terms could be

changed and were changed in some instances.    See Thai

Pineapple, 1999 WL 288772, at *4 & n.11.    There was no reason

for Commerce to abandon its presumption in this matter.     The

court therefore reverses Commerce’s use of date of contract

and directs the Department to use invoice date for date of

sale purposes.

II. Use of Single Weighted-Average Cost of Production Covering
Entire 18-Month Period of Review

A.   Background

     In the Final Results, for COP and CV purposes, Commerce

used a single weighted-average cost for the entire POR.     Final
Court No. 98-03-00487                                     Page 7


Results, 63 Fed. Reg. at 7,399.       TPC argued that this single

weighted-average cost failed to take into account the rising

cost of fresh pineapple fruit from 1994 through the POR.         Id.

TPC alleged that this resulted in significant distortions in

Commerce’s price-cost comparisons.       Id.

       The court found that the use of the single weighted-

average cost did not take into account the significant rise in

the cost of pineapple fruit, the primary input of canned

pineapple fruit (“CPF”).       Thai Pineapple, 1999 WL 288772, at

*3.3       The court also found that Commerce had previously

“adjusted for changes in costs over the POR or matched costs

to POR sales more specifically than it did here.”       Id.    The

court noted that in Fujitsu Gen. Ltd. v. United States, 88

F.3d 1034 (Fed. Cir. 1996), the Federal Circuit sustained the

use of annual weighted-average COP in calculating FMV, and

that this was what TPC was seeking: “they want costs for a

fiscal year matched to sales for a fiscal year.”       Thai

Pineapple, 1999 WL 288772, at *3.       The court instructed

Commerce to revisit the issue and “reanalyze the data to


       3
       The court noted TPC’s calculations reflecting a [ ]%
rise in fresh pineapple costs per carton of CPF from 1994 to
1995 and a [ ]% increase from 1994 to 1996. The price per
standard carton in 1994 was [ ] baht, [ ] baht in 1995 and
[ ] baht in 1996. Thai Pineapple, 1999 WL 288772, at *2,
n.4.
Court No. 98-03-00487                                    Page 8


determine whether TPC has provided sufficient data to match

costs to appropriate fiscal year sales.     If it has, in the

absence of any proper antidumping policy reason . . . Commerce

must proceed as it has in the past and match fiscal year costs

with sales.”   Id. at *4.

     On remand, Commerce recalculated separate costs for

fiscal years 1995 and 1996.   Remand Results, at 11.         “Where CV

is the basis for normal value, we have matched 1995 U.S. sales

to 1995 CVs, and have matched 1996 U.S. sales to 1996 CVs.

With respect to the sales-below-cost test, we have tested 1995

comparison market sales against 1995 costs, and have tested

1996 comparison market sales against 1996 costs.”       Id.     Third

country sales made in December 1994, and used in the margin

calculation, were tested against 1995 costs.     Id.    Commerce

stated that it believed 1995 annual costs were representative

of   December 1994, “and that the use of December 1994 sales

pursuant to the contemporaneity requirement does not warrant a

departure from our practice of using POR costs.”       Id.     TPC

argues that the failure to use 1994 costs does not conform to

the court’s remand instructions.     Commerce counters that its

longstanding policy is to use costs incurred during the POR

for its COP and CV costs analysis.     Remand Results, at 12.
Court No. 98-03-00487                                   Page 9


B.    Discussion

      The matching of costs actually puts two issues before the

court: 1) the basis on which sales must be matched to costs

(i.e. fiscal year, semi-annually, etc.) and 2) whether costs

incurred outside of the POR, or period of investigation

(“POI”), should be matched to the sales made during the same

year whether or not the sales are within the POI or the POR.

The court ruled on the first issue in Thai Pineapple, and on

remand Commerce generally used fiscal year costs.      The court

finds that the use of fiscal year costs adequately addresses

the issue of TPC’s rising pineapple costs, and sustains the

use of separate weighted-average costs for 1995 and 1996.        The

Department’s decision to use only POR costs, however, now

raises the second issue.

      Sections 1677b(b)(3)(A) and 1677b(e)(1) of Title 19

require that in calculating COP and CV, the Department use

costs “during a period which would ordinarily permit the

production” of the foreign like product or the merchandise,

“in the ordinary course of business.”    19 U.S.C. §

1677b(b)(3)(A) & 1677b(e)(1) (1994).    The period to be used is

not further defined in the statute, nor does the statute

dictate the methodology Commerce must use to calculate COP or

CV.    See AK Steel Corp. v. United States, No. 96-05-01312,
Court No. 98-03-00487                                 Page 10


1997 WL 728284, at *5 (Ct. Int’l Trade Nov. 14, 1997) (statute

does not “address the method by which Commerce must calculate

the COM” for either COP or CV).   Therefore, pursuant to

Chevron U.S.A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837, 842-43 (1984), the court must defer to the

agency’s reasonable interpretation of this statute.   Commerce

is directed, however, to determine COP as “accurately as

possible.”   Cinsa, S.A. de C.V. v. United States, 966 F. Supp.

1230, 1239 (Ct. Int’l Trade 1997) (quoting Timken Co. v.

United States, 18 CIT 1, 10, 852 F. Supp. 1040, 1049 (1994)).

Commerce states that its longstanding practice is to use the

cost of manufacturing (“COM”)4 during the POI/POR for its COP


    4  Commerce’s standard practice in calculating COP and CV
is to use COM, rather than cost of goods sold (“COGS”),
because COM “represents the cost to manufacture the product
during the period.” Certain Preserved Mushrooms from
Indonesia, 63 Fed. Reg. 72,268, 72,273 (Dep’t Commerce 1998)
(notice of final determination of sales at LTFV). The
Department states that it does not generally use COGS because
of concerns over the inclusion of the value of inventory from
a previous period. Id. COGS is an accounting method used to
measure costs. Inventory value is an issue when using COGS
because COGS is calculated by “(1) adding the cost of goods
manufactured to the beginning finished goods inventory so as
to find the total amount available for sale and then (2)
subtracting the ending finished goods inventory.” Robert N.
Anthony & James S. Reece, Accounting Principles 146 (6th ed.
1989). Because inventory can be valued in different ways,
Commerce expresses concern that costs based on COGS may vary
depending on the method selected. Gov’t Supplemental Br. at 5
(citing Accounting Principles at 151: “the choice of
                                                (continued...)
Court No. 98-03-00487                                  Page 11


and CV calculation.     The fact that a practice is longstanding,

however, is only justification for the practice’s use if it is

also reasonable and in accordance with law.     See Mitsubishi

Heavy Indus., Ltd. v. United States, 15 F. Supp.2d 807, 813-14

(Ct. Int’l Trade 1998) (approving Commerce’s test because it

was both longstanding and consistent with law).

      Commerce analyzes costs based on the cost to produce the

merchandise during the period in which sales are being made,

“as opposed to the cost to produce each of the particular

sales made during the reporting period.”     Remand Results, at

12.   Commerce therefore requests that respondents report the

weighted average production data based on costs incurred

during the POI/POR.     Stainless Steel Bar from Spain, 59 Fed.

Reg. 66,931, 66,938 (Dep’t Commerce 1994) (notice of final



      4
      (...continued)
[inventory] method can have a significant effect on net
income.”). In contrast, using COM during the period “normally
covers the period needed to produce the subject merchandise
just prior to export and excludes the changes in inventory.”
Mushrooms, 63 Fed. Reg. at 72,273.
     The court requested further briefing on the Department’s
use of COM, rather than COGS, which clarified that TPC did
not, in fact, request that Commerce utilize a COGS
methodology. Although TPC says that COGS would be a more
appropriate methodology, it submitted its costs based on COM
for each fiscal year (1994, 1995, and 1996) and it requests
that separate fiscal year COM be used for each period. TPC
Supplemental Br. at 4, 5, & 9. The court, therefore, need not
resolve whether COGS should be used.
Court No. 98-03-00487                                  Page 12


determination of sales at LTFV).   Commerce departs from this

practice in unique circumstances, “such as when production did

not occur during the period of investigation.”   Id.    “[A]bsent

strong evidence to the contrary, the Department assumes that

the cost structure during the POI is representative and can be

used to calculate an estimate of the cost of production.”       Id.

Commerce recognizes that the statutory language is broad

enough to accommodate calculating COP and CV on a different

basis, but it has chosen to use costs during the POR/POI as a

“consistent and predictable approach.”   Remand Results, at 27.

      In some instances, the cost of manufacturing the
      particular product sold during the POR/POI is higher than
      the cost of the identical product manufactured during the
      POR/POI; however, sometimes it is lower. We believe that
      having a consistent and predictable approach as to which
      method we use eliminates results-oriented arguments
      regarding which approach to take in a given case.

Id.

       In requesting that Commerce deviate from the standard

practice in this case, TPC relies principally on two

determinations: Sweaters Wholly or in Chief Weight of Man-Made

Fiber from Taiwan, 55 Fed. Reg. 34,585 (Dep’t Commerce 1990)

(final determination of sales at LTFV) [hereinafter

“Sweaters”] and Fresh and Chilled Atlantic Salmon from Norway,

58 Fed. Reg. 37,912 (Dep’t Commerce 1993) (final results of

antidumping duty admin. rev.) [hereinafter “Salmon”].     The
Court No. 98-03-00487                                     Page 13


court found that these determinations supported an adjustment

for changes in costs over the POR and matching costs to sales

more closely than was done in the original Final Results.        See

Thai Pineapple, 1999 WL 288772, at *3-4.

    In Sweaters, the Department departed from using annual

average unit costs because there was a significant variation

between what was produced during the POI and what was sold

during the POI.     55 Fed. Reg. at 34,596.   Instead the

Department used actual costs incurred during the period of

production.   Id.    This reasoning, however, does not require

using costs from outside the POR in the case of TPC because

there was no difference between the CPF produced during the

POR and the CPF sold during the POR.     In Salmon, the

Department did not use a single cost of cultivation (“COC”)

for the entire eighteen month POR.     The court discussed

Salmon in Thai Pineapple and found the reasoning in Salmon

justified a closer matching of costs to sales:

    [G]iven the fluctuations of farmers’ costs during the
    POR, the ease with which different generations’ COC can
    be segregated and the fact that we have calculated
    separate 1990 and 1991 processing costs for respondent .
    . . we believe that it is reasonable to use separate 1990
    and 1991 COCs.

Thai Pineapple, 1999 WL 288772, at *4 (quoting Salmon, 58 Fed.

Reg. at 37,913).     Commerce’s explanation that the
Court No. 98-03-00487                                  Page 14


particularity of salmon cultivation (a typical salmon harvest

averages eighteen to twenty-four months),5 requires the use of

non-POR costs is reasonable.   CPF does not have the

particularities of the subject merchandise in Sweaters or

Salmon which would necessitate the use of non-POR costs.6

Moreover, a closer matching of costs to sales was achieved

upon remand in this case.

    TPC insists that the Department should have used 1994 COM

in the calculation of CV for comparison with U.S. sales of

goods manufactured in 19947 and for the COP calculation for

testing third-country sales of goods manufactured in 1994.8


    5  Fresh and Chilled Atlantic Salmon from Norway, 56 Fed.
Reg. 7,661, 7,662 (Dep’t Commerce 1991) (final determination
of sales at LTFV) (“Because the growth cycle of the subject
merchandise is approximately 18 to 24 months, we requested
production costs for the previous two to three years”).
    6  In Stainless Steel Bar from India, Commerce also
deviated from its usual practice and used cost information
from outside the POR because of limited production of the
subject merchandise during the POR. 62 Fed. Reg. 4,029,
4,030-31 (Dep’t Commerce 1997) (final results of new shipper
antidumping duty admin. rev.). Limited production is not a
concern in the case of TPC.
    7  Although TPC speaks of goods manufactured in 1994, the
record does not reveal in which year goods were manufactured.
    8 TPC had reported five months of third-country sales
invoiced in 1994. TPC Br. at 9-10. This was in response to
Commerce’s request that TPC report all sales in the third-
country for a period commencing 90 days prior to the first
                                                (continued...)
Court No. 98-03-00487                                 Page 15


TPC Comments at 2.   TPC states that sales observations with

invoice dates in October through December of 1994 “were

excluded pursuant to the sales below cost test.”    TPC Comments

at 6 n.6 & Ex. 1 (citing Commerce’s “Below Cost HM Sales”

table).   TPC alleges that the 1995 costs are not

representative of 1994 sales.   Although TPC’s 1994 weighted-

average costs may be somewhat lower than the 1995 costs,9 this

is not an investigation of 1994 sales, and only very year-end




    8(...continued)
date of sale in the United States. Because Commerce based
date of sale on date of contract, and the date of contract
preceded the date of entry into the United States by several
months, “the first date of sale on an EP sale to the United
States [resulting in an entry] during the POR . . . took place
in November 1994 and TPC was required to report sales in
Germany commencing with invoices issued in August 1994, 90
days before.” TPC Br. at 10, n.25. The “90/60" day
contemporaneity window exists because Commerce limits the
universe of potential matches to those sales “within 90 days
before and 60 days after the month of the U.S. sale.” E.I.
DuPont de Nemours & Co. v. United States, No. 96-11-02509,
1998 WL 42598, at *13 (Ct. Int’l Trade Jan. 29, 1998).
    9  The finished product costs rose by [ ]% from 1994 to
the first half of 1996, but only rose by [ ]% from 1994 to
1995. Thai Pineapple, 1999 WL 288772, at *2 n.4. Using
separate fiscal year costs has therefore narrowed the cost
increase experienced by TPC because 1995 costs were used
instead of the single weighted-average cost for the entire
POR.
Court No. 98-03-00487                                  Page 16


1994 third-country and U.S. sales were used in the margin

calculation.10   Remand Results, at 11.

     Because the statute permits Commerce to determine the

period “which would ordinarily permit the production” of the

foreign like product or the merchandise, “in the ordinary

course of business,” it was not unreasonable, under the facts

of this case, for Commerce to select fiscal years within the

POR as the relevant period for calculating costs.     The court

finds that in this case, using separate 1995 and 1996 costs

sufficiently accounts for the rising pineapple costs incurred

by TPC, and complies with the court’s remand instruction to

“match fiscal year costs with sales.”     Thai Pineapple, 1999 WL

288772, at *4.   The court does not find that the circumstances

of this case warrant using costs from outside of the POR, and

therefore sustains Commerce’s calculation of COP and CV based

on 1995 and 1996 COM.




     10 It is not clear what effect using invoice date for
date of sale will have on the use of sales and costs from
outside the POR.
Court No. 98-03-00487                                  Page 17


III. Inclusion of U.S. Interest Expenses in Denominator of CEP
Profit Ratio

A.   Background

     The court found that Commerce’s calculation of CEP profit

differed from the approach set out in the statute.     Thai

Pineapple, 1999 WL 288772, at *7 (citing 19 U.S.C. §

1677a(f)(1)-(2)(A) (1994)).    In the Final Results, Commerce

calculated CEP profit by computing the ratio of total profit

to total expenses and multiplying that ratio, on a

transaction-by-transaction basis, by reported U.S. selling

expenses.   Final Results, 63 Fed. Reg. at 7,395.    The court

held that the statute intended that “profit would be allocated

to U.S. sales in the same ratio as United States selling

expenses are to total expenses.”     Thai Pineapple, 1999 WL

288772, at *7.    Furthermore, 19 U.S.C. § 1677a(f) requires

that the “statutory ratio applied to ‘actual profit’ for

purposes of calculating CEP profit must be calculated on a

proportional basis.”    Id. at *8.   Commerce was directed to

demonstrate on remand that the total expense denominator of

the ratio to be applied to total actual profit to obtain the

CEP profit adjustment contains all interest expenses

(including those relating to U.S. sales) as required by 19
Court No. 98-03-00487                                  Page 18


U.S.C. § 1677a(f)(2)(C).     Thai Pineapple, 1999 WL 288772, at

*9.

B.    Discussion

      For cost of production purposes respondent reports total

interest expenses covering inventory carrying costs and credit

extension expenses.     See TPC Section D Questionnaire (Sept. 5,

1996), at D-25, field 10.0, P.R. Doc. 11 (requesting net

interest expense incurred by company in connection with

production and sale of foreign like product).11    For price

adjustment purposes, however, Commerce requires respondents to

impute interest expenses separately for U.S. sales, even

though companies may not account for such expenses separately,

because, inter alia, relevant differences between U.S. and


      11Commerce states in the Remand Results that the annual
interest amount reported as part of COP/CV reflects the costs
of carrying merchandise in inventory and extending credit for
the following reasons:

      The annual interest expense incurred by a company, and
      reported as an element of COP/CV, will reflect the extent
      to which the company does not immediately receive payment
      upon production of the merchandise, i.e., the opportunity
      cost of having the merchandise sit in inventory prior to
      sale, and of extending credit after the sale. To the
      extent that a company incurs a longer waiting period
      between production and payment, it will not have recourse
      to such funds and will generally incur greater financial
      expenses relative to receiving payment immediately upon
      production.

RR, at 20-21.
Court No. 98-03-00487                                  Page 19


“home” market sales must be accounted for.     See e.g., 19

U.S.C. § 1677b(a)(6)(C)(iii) (1994) (circumstances of sales

adjustment).   It is this separate U.S. sales figure which TPC

wishes included in the denominator.     It also appears true, as

TPC alleges, that the manner of calculating U.S. imputed

interest expenses may result in some cases in amounts which

are not fully reflected in the total interest expenses figure

which is used in the denominator of the CEP profit ratio.       See

TPC Section C Questionnaire (Sept. 5, 1996), at C-21, field

36.0, P.R. Doc. 11 (Commerce’s instructions regarding

reporting U.S. credit expense).     Nonetheless, Commerce argues

its method will avoid double counting, and that also appears

to be true as to the normal case.

    Theoretically, the total expenses denominator would

reflect the interest expenses captured in the U.S. sales

expenses numerator specified in 19 U.S.C. § 1677a(f)(2)(B), as

well as “home” market interest expenses, because the total

expenses denominator is derived from a net unit figure based

on all company interest expenses without regard to sales

destination. The lines of computer program results cited by

Commerce generally support the theory.     See RR, at 23 n.21

(citing computer lines from Computer Program for Draft Results

of Redetermination which show inclusion of interest expenses
Court No. 98-03-00487                                  Page 20


in COP, inclusion of interest expense in U.S. cost and CV, and

inclusion of these costs in “Total Expenses” in the CEP profit

calculation).12   The issue is whether there is some peculiarity

of this case that belies the relevancy of the theory.

     TPC has not established that there is any great

discrepancy here.   For example, it does not demonstrate a

distortion caused by differing expenses over time.     Nor does

it allege that in this case there can be no double counting

because it had no or little actual U.S. interest expenses, but

only imputed U.S. expenses.13   Plaintiff alleges nothing to

counter Commerce’s reasoning on this point.   Accordingly, the

court sustains Commerce’s CEP profit calculation.

IV. Assessment rate for entries made after the final LTFV
determination

A.   Background

     The remaining issue on remand relates to the propriety of

Commerce’s assessment rate calculations.   Commerce increased

the cash deposit rate for entries of subject merchandise made

after the final less than fair value (“LTFV”) determination,


     12 There was no change in the draft margin program from
the draft remand results to the final remand results. See
Declaration of Gabriel Adler (Nov. 24, 1999), at ¶ 3, Attach.
2 of Commerce’s letter to the court dated Nov. 29, 1999.
     13 The court does not address whether these are truly
distortive situations.
Court No. 98-03-00487                                  Page 21


but before the International Trade Commission (“ITC”) final

affirmative injury determination.     Remand Results, at 2.     This

rate was higher than the estimated duty rate from the

preliminary LTFV determination.     Compare Notice of Amended

Preliminary Determination: CPF From Thailand, 60 Fed. Reg.

9,820, 9,821 (Dep’t Commerce 1995) (all others rate 3.92

percent) with Final Determination of Sales at LTFV: CPF From

Thailand, 60 Fed. Reg. 29,553, 29,571 (Dep’t Commerce 1995)

(all others rate 25.76 percent).14    The statute establishes a

cap period for the assessment rate on entries made between

Commerce’s preliminary LTFV determination and the ITC’s final

affirmative injury determination.     See 19 U.S.C.A. § 1673f(a)

(West Supp. 1999).

    The court remanded the issue regarding assessment rates

during the cap period to allow the parties an adequate

opportunity to address the issue.     Thai Pineapple, 1999 WL

288772, at *2.   TPC argues that Commerce erred in adopting the



    14    The amended preliminary LTFV determination was
published on February 22, 1995, the final determination was
published on June 5, 1995, and the ITC’s final affirmative
injury determination was published on July 19, 1995. See CPF
From Thailand, 60 Fed. Reg. at 9,820 (notice of amended
prelim. determination); CPF From Thailand, 60 Fed. Reg. at
29,553 (final determination of sales at LTFV); CPF From
Thailand, 60 Fed. Reg. 37,073 (ITC 1995) (ITC determination of
material injury).
Court No. 98-03-00487                                   Page 22


second and higher assessment rate as the cap for entries made

after the final determination, but before the ITC’s final

injury determination.   TPC contends that the statute requires

that Commerce cap the amount of duties collected at the rate

established in the preliminary LTFV determination.

B.   Discussion

     Commerce’s longstanding practice has been to calculate

separate assessment rates during the cap period: one for the

time between the preliminary and final determination, and

another between the final determination and the ITC’s final

determination.15   That the practice is longstanding is not

sufficient to justify its application, however, it is also

reasonable.   See Mitsubishi, 15 F. Supp.2d at 813-14

(approving Commerce’s test because it was both longstanding

and consistent with the law); cf. Sonco Steel Tube Div. v.

United States, 12 CIT 745, 749-52, 694 F. Supp. 959, 962-65



     15 Commerce’s expression of this policy dates back to
1986.   See Antidumping Duties; Proposed Rule, 51 Fed. Reg.
29,046, 29,051 (Dep’t Commerce 1986) (“dumping margin
established in the Secretary’s final determination becomes the
maximum amount which the Secretary may assess on entries made
between publication of that determination and the publication
of the Commission’s final affirmative determination);
Antidumping Duties; Final Rule, 54 Fed. Reg. 12,742, 12,757
(Dep’t Commerce 1989) (“For an entry made after the final
determination, the cash deposit or bond is set by the
Department’s final determination.”).
Court No. 98-03-00487                                 Page 23


(1988) (rejecting ITA argument regarding longstanding practice

because practice not explained).

    The statutory section at issue is the “Deposit of

estimated antidumping duty under section 1673b(d)(1)(B) of

this title," which provides as follows:

         If the amount of a cash deposit, or the amount
    of any bond or other security, required as security
    for an estimated antidumping duty under section
    1673b(d)(1)(B) of this title is different from the
    amount of the antidumping duty determined under an
    antidumping duty order published under section 1673e
    of this title, then the difference for entries of
    merchandise entered, or withdrawn from warehouse,
    for consumption before notice of the affirmative
    determination of the Commission [ITC] under section
    1673d(b) of this title is published shall be —

              (1) disregarded, to the extent that
         the cash deposit, bond, or other security
         is lower than the duty under the order, or

              (2) refunded or released, to the extent
         that the cash deposit, bond, or other security
         is higher than the duty under the order.

19 U.S.C.A. § 1673f(a).   Commerce’s regulation, in effect

during the first administrative review, states the

Department’s interpretation of this section.   See 19 C.F.R. §

353.23 (1996).   It provides that if the duties assessed in

either the preliminary or final determination by Commerce
Court No. 98-03-00487                                  Page 24


differ from the duties assessed in an administrative review,

Commerce will instruct Customs accordingly.16

    Section 1673b(d) addresses the effect of Commerce’s

preliminary determination in the LTFV investigation.     19

U.S.C. § 1673b(d) (1994).   Under section 1673b(d), if

Commerce’s preliminary determination is affirmative, Commerce

estimates the weighted average dumping margin for exporters

and producers individually investigated, and determines an

all-others rate.   19 U.S.C. § 1673b(d)(1)(A)(i)-(ii).



    16   The regulation states in relevant part:

    If the cash deposit or bond required under the
    Secretary’s affirmative preliminary or affirmative final
    determination is different from the dumping margin the
    Secretary calculates under § 353.22 [administrative
    review of orders and suspension agreements], the
    Secretary will instruct the Customs Service to disregard
    the difference to the extent that the cash deposit or
    bond is less than the dumping margin, and to assess
    antidumping duties equal to the dumping margin calculated
    under § 353.22 if the cash deposit or bond is more than
    the dumping margin.

19 C.F.R. § 353.23 (1996) (emphasis added).

     The current version of this regulation, 19 C.F.R. §
351.212(d) (1999), differs slightly from the 1996 version.
The 1999 version includes a description of the provisional
measures deposit cap in countervailing duty cases. The 1999
version also clarifies that the duties assessed under the
preliminary or final determination are “provisional duties,”
while the duties assessed in an administrative review are
“final duties.” Otherwise, there has been no substantive
change to this regulation.
Court No. 98-03-00487                                 Page 25


Commerce then orders the posting of a cash deposit, bond, or

other security, and the suspension of liquidation of entries.

19 U.S.C. § 1673b(d)(1)(B)-(2).    Pursuant to 19 U.S.C. § 1673d

(1994), at the time of Commerce’s final affirmative

determination, Commerce again determines the estimated

weighted average dumping margin and orders the posting of a

cash deposit, bond, or other security on entries of subject

merchandise in an amount based on the estimated weighted

average dumping margin or the estimated all-others rate.    19

U.S.C. § 1673d(c)(1)(B)(i)-(ii).

    The court has previously determined that nothing in

section 1673f(a) prevents Commerce from applying two different

assessment caps and, indeed, that this practice is reasonable

and in accordance with law.   See Daewoo Elecs. Co. v. United

States, 13 CIT 253, 712 F. Supp. 931 (1989), aff’d in part,

rev’d on other grounds, 6 F.3d 1511 (Fed. Cir. 1993).17    The

plaintiff in Daewoo presented the same types of arguments as

TPC does here, asserting that the language of section 1673f(a)

requires that the assessment rate be capped at the rate


    17    Daewoo interpreted the 1988 version of the statute.
For the reasons discussed herein, the differences between the
1994 and 1988 statutory sections at issue are inconsequential.
Therefore the court finds that the differences in the statute
do not affect the Daewoo court’s analysis. All references to
the statute will be to the 1994, or most recent version.
Court No. 98-03-00487                                   Page 26


established in the preliminary determination.     Daewoo, 13 CIT

at 275, 712 F. Supp. at 951.   The actual assessment of

antidumping duties does not occur until Commerce conducts its

first administrative review of entries subject to an

antidumping order.   Id. at 276, 712 F. Supp. at 952.     The

court in Daewoo held that 19 U.S.C. § 1673f(a) does not

“impose a limitation on the actual assessment rate by the

rates established in the ITA preliminary determination, but

requires only that the amount of duties assessed on entries

made prior to the ITC final determination should be

‘disregarded, to the extent the cash deposit collected is

lower than the duty.’” Id. (quoting 19 U.S.C. § 1673f(a)(1)

(1988)).

    Section 1673b(d) authorizes Commerce to order the

suspension of liquidation and the collection of a cash

deposit, bond, or other security, pursuant to the Department’s

preliminary affirmative determination.   19 U.S.C. § 1673b(d).

In Daewoo, the court found that the reference to 19 U.S.C. §

1673b(d)(2) in 19 U.S.C. § 1673f(a) did not “limit Commerce’s

authority to adjust those preliminary rates in their

subsequent final determination in LTFV investigations.”

Daewoo, 13 CIT at 277, 712 F. Supp. at 952.     The court also

noted that the legislative history to 19 U.S.C. § 1673b(d)(2)
Court No. 98-03-00487                                  Page 27


supported the conclusion that the preliminary deposit rates

could be adjusted when more accurate information became

available.   Id. (citing S. Rep. No. 96-249, at 65 (1979),

reprinted in 1979 U.S.C.C.A.N. 381, 451).     Moreover, 19 U.S.C.

§ 1673d(c)(1)(C) authorizes Commerce to order the suspension

of liquidation and the posting of the cash deposit after a

final affirmative determination where there has been a

negative preliminary determination.     Section 1673d(c)(1)(C)

references the authorization provision of section 1673b(d)(2)

regarding the suspension of liquidation.     In Daewoo, the court

held that the reference to this authorization provision in

section 1673b(d) “indicates that that provision granted

Commerce a continuing authority to suspend liquidation and to

collect estimated duty deposits.”     Daewoo, 13 CIT at 277, 712

F. Supp. at 953.

    TPC maintains that Daewoo was wrongly decided, based on a

plain reading of 19 U.S.C.A. § 1673f(a).     Relying on Chevron,

467 U.S. 837, TPC asserts that the court erred when it looked

to legislative history because the statute is clear,

preventing the need to look beyond its plain language.     The

court does not agree.   As noted by Commerce, the statute is

silent with regard to the application of a cap between the

time of Commerce’s final determination and the ITC’s final
Court No. 98-03-00487                                     Page 28


determination.     The court in Daewoo therefore properly

considered the legislative history in determining that

Commerce’s practice was in accordance with law.

       In Daewoo, the court carefully analyzed the interplay of

section 1673f(a) with sections 1673b and 1673d, as well as the

overall structure and purpose of the statute.        Daewoo, 13 CIT

at 276-77, 712 F. Supp. at 952-53.        The court noted that

plaintiff’s arguments ignored “the provisional nature of

duties which are imposed as a result of the final

determination and which also serve merely as estimated duty

until the actual assessment rates are established as a result

of the administrative review.”     Id. at 278, 712 F. Supp. at

953.     Plaintiff’s interpretation of 19 U.S.C. § 1673f(a) in

Daewoo would have rendered “meaningless the meticulous

calculations required under the Act in both the final

determinations of LTFV investigations and final results of the

first administrative review.”     Id.18


       18
        As noted by Commerce in one of its early applications
of the two-cap policy, the policy results in a more accurate
assessment of estimated duties.

       [B]ecause the dumping margin established in the final
       determination is based on verified information afte[r]
       all the parties have had an opportunity to comment, it is
       a better estimate of the degree of price discrimination
       than the preliminary deposit rate, which was based only
                                                   (continued...)
Court No. 98-03-00487                                Page 29


    TPC alternatively argues that the changes made to the

statute, pursuant to the Uruguay Round Agreements Act

(“URAA”), Pub. L. No. 103-465, 108 Stat. 4809 (1994), require

that Commerce change its interpretation of section 1673f(a).

The court finds that the changes to the relevant statutory

provision were minor, and do not undercut Commerce’s practice.

The changes made to 19 U.S.C.A. § 1673f(a)(1)-(2), by

amendment in 1996, are inconsequential.   For example, the

amendment replaced the words "cash deposit" for "cash deposit,

bond, or other security."   Compare 19 U.S.C.A. § 1673f(a)(1)-

(2) (West Supp. 1999) with 19 U.S.C. § 1673f(a)(1)-(2) (1988).

    The amendments made to 19 U.S.C. § 1673b(d) were also

minor.   The subsection was restructured and renumbered, and

the 1994 version states with greater clarity the Department’s



    18
     (...continued)
    on the best information available to the Department at
    that time. Accordingly, once the final determination is
    published, estimated duties are collected . . . until the
    order is issued at the final, rather than the preliminary
    rate.

Color Television Receivers from Taiwan, 51 Fed. Reg. 46,895,
46,903 (Dep’t Commerce 1986) (final results of antidumping
duty admin. rev.), aff’d in part and remanded in part, AOC
Int’l Inc. v. United States, 13 CIT 716, 722-24, 721 F. Supp.
314, 319-21 (1989) (adhering to reasoning of Daewoo), rev’d on
other grounds, Zenith Elecs. Corp. v. United States, 77 F.3d
426 (Fed. Cir. 1996).
Court No. 98-03-00487                                   Page 30


responsibilities after a preliminary affirmative

determination.   Compare 19 U.S.C. § 1673b(d) (1994) with 19

U.S.C. § 1673b(d) (1988).   Likewise the 1994 amendments to 19

U.S.C. § 1673d(c) do not alter the meaning of this section.

Compare 19 U.S.C. § 1673d(c) (1994) with 19 U.S.C. § 1673d(c)

(1988).   TPC makes much of the differences between section

1673d(c)(1)(B) (1988) and section 1673d(c)(1)(B)-(C) (1994).

Sections 1673d(c)(1)(B)-(C) of the statute state the effect of

a final affirmative determination by Commerce.     The 1988

version of the statute grouped together Commerce’s authority

to order the suspension of liquidation and the posting of a

cash deposit, bond, or other security, in cases where it made

an affirmative final determination after a negative

preliminary determination.19   19 U.S.C. § 1673d(c)(1)(B)

(1988).   The current version of the statute states that in

cases of a final affirmative determination, Commerce will

order the posting of a cash deposit, bond, or other security.

19 U.S.C. § 1673d(c)(1)(B) (1994).   In the following



    19   “(B) in cases where the preliminary determination by
the administering authority under section 1673b(b) of this
title was negative, the administering authority shall order
under paragraphs (1) and (2) of section 1673b(d) of this title
the suspension of liquidation and the posting of a cash
deposit, bond, or other security.” 19 U.S.C. § 1673d(c)(1)(B)
(1988).
Court No. 98-03-00487                                 Page 31


subsection, the statute provides that in cases of a negative

preliminary determination, Commerce will order the suspension

of liquidation under the authorization provision of section

1673b.20   Id.

     TPC asserts that the differences in the 1994 statute

require that the court’s reasoning in Daewoo be discarded.      In

referring to situations where the preliminary determination is

negative and the final determination is affirmative, the 1994

statute only states that Commerce shall order the suspension

of liquidation, without stating that Commerce shall order the

posting of the cash deposit, bond, or other security.   The


     20    The statute currently reads, in relevant part:

(c) Effect of final determination
          (1) Effect of affirmative determination by the
     administering authority

          If the determination of the administering authority
     under subsection (a) of this section is affirmative, then
     - . . .
          (B)(ii) the administering authority shall order the
     posting of a cash deposit, bond, or other security . . .
     for each entry of the subject merchandise in an amount
     based on the estimated weighted average dumping margin or
     the estimated all-others rate, whichever is applicable,
     and
          (C) in cases where the preliminary determination by
     the administering authority under section 1673b(b) of
     this title was negative, the administering authority
     shall order the suspension of liquidation under section
     1673b(d)(2) of this title.

19 U.S.C. § 1673d(c) (1994).
Court No. 98-03-00487                                  Page 32


court does not agree that this formulation alters the holding

in Daewoo.   New section 1673d(c) is more properly read to mean

that regardless of the preliminary determination result,

Commerce orders the posting of a cash deposit, bond, or other

security at the time of a final affirmative determination.

Commerce does not need to order the suspension of liquidation

in a case where the preliminary determination was affirmative,

because liquidation would already have been suspended under

section 1673b(d)(2).    19 U.S.C. § 1673b(d)(2).   Section

1673d(c)(1)(C) singles out suspension of liquidation in

referring to situations where the preliminary determination

was negative and the final determination affirmative, because

in such a case the suspension of liquidation would not have

already occurred.   See 19 U.S.C. § 1673d(c)(1)(C).    Therefore,

the change to this section of the statute has not altered the

basic meaning of the provision, rather, it has clarified

Commerce’s responsibilities upon making a final affirmative

determination.

    None of the changes to the statute regard the

Department’s assessment rate capping policy for entries made

after Commerce’s final LTFV determination, but before the

ITC’s final injury determination.    Commerce’s interpretation

and application of 19 U.S.C.A. § 1673f(a) is reasonable.     If
Court No. 98-03-00487                                     Page 33


Congress objected to Commerce’s longstanding practice

regarding assessment caps, and intended to change that

practice, it likely would have expressed such an intent in the

legislative history, if not within the statutory language

itself.   The House Report to the URAA states that sections

1673b and 1673d (sections 733 and 735 of the Tariff Act) were

amended to conform U.S. law more closely to the Uruguay Round

Agreement, and does not indicate any substantive change in

U.S. practice.     H.R. Rep. 103-826(I), at 50-51 (1994),

reprinted in 1994 U.S.C.C.A.N. 3773, 3822-23.

    TPC cites no legislative history to support its position

that the 1994 URAA amendments reflect an intent to change

Commerce’s practice under section 1673f(a).     Because

Commerce’s practice of applying two assessment cap rates is

reasonable, conforms to the statute, and results in a more

accurate assessment rate, and because TPC offers no weighty

arguments in its favor, TPC does not persuade this court that

Commerce’s policy should be changed.

    For the foregoing reasons, the court upholds Commerce’s

capping the assessment rate between the time of the final LTFV

determination and the ITC’s final injury determination at the

final LTFV rate.
Court No. 98-03-00487                                     Page 34


                              Conclusion

    The court finds that there was no reason for Commerce to

abandon its presumption of using invoice date for date of

sale, and therefore reverses Commerce on this issue.       Commerce

must use invoice date for date of sale purposes on remand.

    The court upholds Commerce’s use of fiscal year costs for

COP and CV purposes, and the calculation of CEP profit, as

well as Commerce’s practice regarding the assessment rate

applied during the cap period.

    Remand results are due within 30 days.      Objections

thereto are due 15 days thereafter and responses 11 days

thereafter.




                                _______________________
                                     Jane A. Restani
                                         JUDGE


Dated:   New York, New York

         This 10th day of February, 2000.
