CIT Remands Antidumping Admin Review on Glycine From Japan
The Court of International Trade on April 11 ordered the Commerce Department to redo parts of an antidumping duty administrative review on glycine from Japan. Judge Stephen Vaden remanded the final results of the review to Commerce for the agency to reconsider its decision that the "compensation for payment expense" was properly categorized as a general and administrative expense. The judge sustained Commerce's decision to use generally accepted accounting principles-compliant research and development cost records instead of trial balances was supported by law, as well as the agency's finding that respondent Nagase waited too long in finding its own assessment rate error.
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 court found that Commerce’s decision to include Nagase’s “compensation for payment” expense was not properly explained by the agency. Nagase said that the expense stemmed from halted production and disposal of already produced inventory. Commerce's explanation "amounted to three statements," Vaden said, and did not “articulate a rational connection between the facts found and the choice made” required by the substantial evidence standard. "One can squint and see similarities" between the compensation for payment expense and other expenses, the judge said, "Yet the compensation payment was not a regulatory penalty, nor a litigation accrual, nor a fine."
The court found that Commerce correctly found that Nagase treated its research and development costs as a general expense, rather than attributing them to specific products. "Before the period of review, Nagase had never associated research and development expenses with specific products because its research functioned 'as a seed for future products' rather than existing ones," Vaden said. Nagase switched its accounting method more than halfway through the period of review and provided trial balance accounts and worksheets that allocated research and development costs to product categories. Commerce correctly characterized them as “‘after-the-fact" allocations of company-wide R&D costs made during the period of review, Vaden ruled.
Finally, the court found that Commerce acted lawfully when it declined Nagase’s untimely request to correct its assessment rate. Nagase mistakenly supplied Commerce with incorrect sales values during the period of review, resulting in an assessment rate of 16 times what Nagase alleges it owed. Judge Vaden noted that despite "the enormous proposed rate, Nagase’s case brief did not challenge or mention the assessment rate."
The question before the court is whether it "may force Commerce to correct an error after it has refused a party’s untimely request to do so," Vaden said. "Neither this Court nor the [U.S.] Court of Appeals for the Federal Circuit has ever found an abuse of discretion where Commerce has declined to correct a ministerial error that was detectable during the original proceedings but was not raised until after publication of the final results and the closure of the five-day window for ministerial error comments."
(Nagase & Co. v. U.S., Slip Op. 23-46, CIT # 21-00574; Judge: Stephen Vaden; Attorneys: Neil Ellis of Neil Ellis for plaintiff Nagase & Co.; Kelly Geddes for defendant U.S. government)