Appealed from: United States Court of International Trade
Before Newman, Plager, and Schall, Circuit Judges.
The opinion of the court was delivered by: Schall, Circuit Judge.
This antidumping action stems from the investigation of ferrosilicon *fn1 imported from Brazil. Plaintiffs/Cross-Appellants, AIMCOR, Alabama Silicon, Inc., American Alloys, Inc., Globe Metallurgical, Inc., and American Silicon Technologies (collectively "AIMCOR"), are United States ferrosilicon producers, manufacturers, or resellers. Defendant/Appellant, Companhia Ferroligas Minas Gerais- Minasligas ("Minasligas"), is a Brazilian producer and exporter of ferrosilicon. Minasligas appeals the decision of the United States Court of International Trade sustaining the determination of the International Trade Administration, United States Department of Commerce ("Commerce"), that Minasligas had sold ferrosilicon at less than fair value and imposing an antidumping order. See AIMCOR v. United States, No. 94-03-00182, 1996 WL 276955, at *2 (Ct. Int'l Trade May 21, 1996). Specifically, Minasligas challenges the inclusion of Brazilian value- added taxes as part of the cost of materials in determining constructed value pursuant to 19 U.S.C. § 1677b(e)(1)(A) (1988). *fn2 See AIMCOR, 1996 WL 276955, at *1. AIMCOR cross-appeals, challenging the interest rate used by Commerce to calculate Minasligas' imputed negative, United States credit expenses. We affirm.
The antidumping laws protect United States industries against the sale of foreign manufactured goods in the United States at prices below the fair market value of those goods in the foreign country. The laws impose additional duties on imported merchandise that is being sold, or is likely to be sold, at less than its fair market value, when those sales materially injure, threaten to materially injure, or retard the establishment of a United States industry. See 19 U.S.C. § 1673. The quantum of the duties imposed, known as the "dumping margin," is the amount by which the foreign market value of the goods exceeds their United States price. See 19 U.S.C. § 1673; 19 C.F.R. § 353.2(f) (1997). These additional duties are designed to account for the dumping margin (i.e., raise the United States price to the foreign market value of the merchandise). See Zenith Elecs. Corp. v. United States, 988 F.2d 1573, 1576 (Fed. Cir. 1993).
The United States price of the goods is either the "purchase price" or the "exporter's sales price." 19 U.S.C. § 1677a(a). The "purchase price" is the price at which a United States buyer purchases or agrees to purchase the merchandise prior to importation. 19 U.S.C. § 1677a(b). The "exporter's sales price" is the price at which the merchandise is sold or agreed to be sold prior to or after importation by or for the account of the exporter. 19 U.S.C. § 1677a(c). Foreign market value is determined using one of three methods: (1) home market sales; (2) third country sales; or (3) constructed value. See 19 U.S.C. § 1677b(a)(1), (2); see also NSK, 115 F.3d at 968. Home market sales is the preferred method for determining foreign market value. See Smith-Corona Group v. United States, 713 F.2d 1568, 1573, 1 Fed. Cir. (T) 130, 134 (Fed. Cir. 1983). When information on home market sales is insufficient, either the third country sales method or the constructed value method is used to determine foreign market value. See Zenith Elecs., 988 F.2d at 1577.
In calculating foreign market value, Commerce disregards home market and third country sales of merchandise at less than the cost of production, if such sales have been made over an extended period of time in substantial quantities and the sales are at prices which do not permit recovery of all costs within a reasonable period of time in the normal course of trade. See 19 U.S.C. § 1677b(b). Whenever sales at less than the cost of production are disregarded and Commerce finds that the remaining sales are an inadequate basis for determining foreign market value, the constructed value method is used to determine foreign market value. See id.; see also NSK, 115 F.3d at 969. Constructed value is calculated by adding the cost of materials, general expenses, profit, and incidental expenses according to a statutory formula. See 19 U.S.C. § 1677b(e)(1). The statute provides in pertinent part as follows:
[C]onstructed value . . . shall [include] . . . the cost of materials (exclusive of any internal tax applicable in the country of exportation directly to such materials or their disposition, but remitted or refunded upon the exportation of the article in the production of which such materials are used) and of fabrication or other processing of any kind employed in producing such or similar merchandise, at a time preceding the date of exportation of the merchandise under consideration which would ordinarily permit the production of that particular merchandise in the ordinary course of business.
19 U.S.C. § 1677b(e)(1)(A); see also 19 C.F.R. § 353.50(a) (1997).
Both United States price and foreign market value are subject to certain adjustments to assure that the quantum of antidumping duties is calculated in a fair manner. See 19 U.S.C. § 1677a(d), (e); 19 U.S.C. § 1677b(a)(1), (a)(4); see also Koyo Seiko Co. v. United States, 36 F.3d 1565, 1568 (Fed. Cir. 1994). Thus, the statute provides that foreign market value may be adjusted for "differences in circumstances of sale." 19 U.S.C. § 1677b(a)(4)(B). These circumstances of sale adjustments may include the costs of advertising, packing, after-sale rebates, and warranty and after-sale service expenses. See 19 C.F.R. § 353.56(a)(1), (2) (1997); Koyo Seiko, 36 F.3d at 1568 (citing Smith-Corona, 713 F.2d at 1573 n.12, 1 Fed. Cir. (T) at 134 n.12).
Turning to the case at hand, on January 12, 1993, AIMCOR; *fn3 Silicon Metaltech Inc.; United Autoworkers of America Local 523; United Steelworkers of America Locals 12646, 2528, 5171, and 3081; and Oil, Chemical & Atomic Workers Local 389 (collectively "petitioners") petitioned Commerce, alleging that ferrosilicon from Brazil was being sold or was likely to be sold in the United States at less than fair value. Initiation of Anitdumping Duty Investigations: Ferrosilicon From Brazil and Egypt, 58 Fed. Reg. at 7529. The petitions were filed on behalf of the United States industry and the employees producing, manufacturing, and reselling material like the product at issue. Id. at 7529-30. The period of inquiry was from July 1 through December 31, 1992. Id. On August 16, 1993, Commerce issued its preliminary determination, finding dumping and suspending liquidation of ferrosilicon from Brazil. Preliminary Determination of Sales at Less Than Fair Value: Ferrosilicon From Brazil, 58 Fed. Reg. 43,323, 43,327 (Aug. 16, 1993) ("Preliminary Determination"). *fn4 On January 6, 1994, Commerce issued its final determination, finding that Minasligas had not sold ferrosilicon at less than fair value. Final Determination of Sales at Less Than Fair Value: Ferrosilicon From Brazil, 59 Fed. Reg. 732, 739-40 (Jan. 6, 1994) ("Final Determination"). *fn5
In making its Final Determination, Commerce based Minasligas' United States price on purchase price because its ferrosilicon was sold to unrelated purchasers in the United States prior to importation and other circumstances did not indicate the exporter's sales price. Id. at 733. As far as foreign market value was concerned, since petitioners had alleged that CBCC's and Minasligas' home market sales were made at less than the cost of production ("COP") and that foreign market value should be based on constructed value, Commerce initiated COP investigations of CBCC and Minasligas prior to making its Final Determination. Id. In a COP investigation, Commerce compares the cost of production *fn6 of the goods at issue to home market sales. See Antidumping Manual, ch. 8, at 60. As noted above, if Commerce determines that a sufficient quantity of home market sales were made at prices below the cost of production, Commerce bases foreign market value on constructed value. *fn7 In making its Final Determination, Commerce determined that CBCC's and Minasligas' home market sales were viable bases for calculating foreign market value. In its Final Determination, it therefore did not base foreign market value upon constructed value. *fn8 Final Determination, 59 Fed. Reg. at 733.
In conducting the COP investigations of CBCC and Minasligas and in arriving at its Final Determination that home market sales were viable bases for calculating foreign market value, Commerce determined that Brazil's economy was hyperinflationary during the period of inquiry. *fn9 Id. Consequently, Commerce calculated monthly values for foreign market value, cost of production, and constructed value to eliminate the distortive effects of inflation. Id. In the COP investigations, Commerce included Brazilian value-added taxes as a cost of materials in the cost of production, for purposes of determining whether home market sales were made at prices above the cost of production. Commerce also included these taxes in calculating constructed value. Id. at 737. This decision to include the value-added taxes for purposes of the COP investigations was relevant to CBCC and Minasligas to the extent that it determined whether Commerce would base foreign market value on home market sales or constructed value.
However, in determining whether value-added taxes should be included in determining constructed value, if this method eventually was used to determine foreign market value, Commerce stated:
[W]hen using [constructed value] as a surrogate for home market prices we must determine if in fact the entity under investigation is able to recover all of the taxes paid on inputs (raw materials) from its domestic sales of subject merchandise. If domestic sales of subject merchandise fully recover all of the domestic taxes paid on inputs, then these taxes would appropriately be excluded from the margin analysis. However, if the producer is not able to recover all ...