Commerce Cannot 'Disaggregate' Price Actually Agreed to by Buyer, Seller in LTFV Case, Brief Says
The Commerce Department cannot redefine price adjustments in less-than-fair-value investigations to "disaggregate" the value actually agreed to by the buyer and the seller, defendant-appellant LDC Argentina told the U.S. Court of Appeals for the Federal Circuit in a Dec. 7 reply brief. Commerce did just that, though, when it made a price adjustment for renewable identification numbers (RINs) -- credits used for compliance with the EPA's Renewable Fuel Standard Program (Vicentin S.A.I.C., et al. v. United States, Fed. Cir. #21-1988).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The case concerns the less-than-fair-value investigation of biodiesel from Argentina, in which LDC Argentina served as a mandatory respondent and got hit with a 60.44% dumping margin. The exporter then launched a challenge at the Court of International Trade contesting, among other things, Commerce's adjustment to constructed value that neutralized the value of RINs reflected in prices for U.S. biodiesel sales.
The trade court first remanded this adjustment but then sustained Commerce's decision to neutralize the differences in value between the U.S. and foreign market biodiesel sales due to the premiums placed on RIN-eligible U.S. sales. The agency did so by dropping U.S. prices by the estimated value for RINs. CIT also upheld Commerce's methodology for calculating the adjustment.
In their briefs to the Federal Circuit, both the Department of Justice and the petitioner, the National Biodiesel Board Fair Trade Coalition, tried to redefine the meaning of "price adjustment" to include "implicit" adjustments that were already in the first price, LDC Argentina said. "Both the United States and the NBB ignore the clear regulatory language defining a price adjustment as 'a change in the price charged for subject merchandise' ... and ignore that this Court has held that identifying the 'first sold' price under 19 U.S.C. § 1677 requires 'consideration' and 'transfer of ownership,'" the reply brief said. "The application of Defendant-Appellees’ novel definitions of a price adjustment and the term 'first sold' to justify Commerce’s deduction from U.S. Price are not in accordance with law."
Commerce cannot make a price adjustment for something that was not adjusted for between the buyer and seller, the respondent argued. What Commerce should have done, though, is used a circumstances of sale adjustment, the brief said. "The circumstances of sale approach advocated for by LDC is adequate under the law because it would remove the expenses associated with RINs from any sales both under [normal value (NV)] and U.S. Price. Therefore, it would allow Commerce to compare all LDC sales in the investigation as if none accumulated the expenses incurred to create the RIN eligibility."