United States Court of International Trade

Sahamitr Pressure Container PLC., v. United States, Slip Op. 24-54

Before the United States Court of International Trade in Sahamitr Pressure Container PLC., v. United States, Court No. 22-00107 (May 2, 2024) was an antidumping case concerning a challenge to the Department of Commerce’s recalculation of sales expense from a foreign producer of propane canisters.  Worldwide Distribution, LLLP was a party to the case as plaintiff-intervenor and Worthington Industries as defendant-intervenor.

Judge Baker sustained the Department of Commerce’s determination based on substantial evidence. On August 15, 2019, Commerce issued an order imposing tariffs on propane canisters published at 84 Fed. Reg. 41,703 as Steel Propane Cylinders from the People’s Republic of China and Thailand: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Orders.  The Thai producer and exporter, Sahamitr Pressure Container and the domestic manufacturer, Worthington Industries, requested an administrative review which lasted 19 months. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 85 Fed. Reg. 63,081, 63,085 published on October 6, 2020. Plaintiff participated as the sole respondent. According to the Agency’s methodology, plaintiff was requested to report sales costs using a transaction-specific method. However, providing such information on an “allocated basis (e.g., on an average basis)” was permissible only when the expenses could not be tied to a specific sale. As it pertains allocated reporting, the Agency explained that such reporting would be acceptable only if the company could “demonstrate that the allocation is calculated on as specific a basis as is feasible (e.g., on a customer-specific basis, product-specific basis, and/or monthly-specific basis, etc.) and is not unreasonably distortive.”

The dispute revolved around the fact that plaintiff reported its certification expenses for United States sales on an allocated basis by applying a “certification-fee ration” to “customers’ gross unit prices to calculate the [reported] per unit certification expense.” Furthermore, the plaintiff neglected to explain its failure to disclose such costs using a transaction-specific system or why the method used was distortive. Defendant-intervenor prompted Commerce to require Sahamitr to explain its failure to report the certification price adjustment or expense on a more specific basis and why the methodology used does not cause inaccuracies.

Plaintiff argued that the company pays its certification fees to outside vendors after the merchandise subject to this review is produced and sold. Moreover, it explained that it cannot attribute individual certification-related expenses to individual sales invoices. Thus, according to Sahamitr, the most accurate basis on which it is able to report period-of-review certification expenses is the expense-allocation method which are based on the company’s books and records kept in the normal course of business. The court, however, was not satisfied by this explanation and held that the company failed to explain why its allocation method did not cause distortions.

Defendant-intervenor, Worthington, prompted Commerce to request plaintiff to calculate a monthly, per unit, certification expense for the period of review as it concerns both the United States and the home market. In response, plaintiff responded with a calculation that showed wide fluctuations in costs from month to month.

In Commerce’s preliminary determination, plaintiff’s proffered allocation of its certification costs were found to be distortive. The Agency noted timing difference between when the company produces and sells cylinders and when it records the certification expenses associated with the same sales. Thus, the Agency did not tolerate the monthly fluctuations reported by Sahamitr’s certification expenses. In its light of the respondent’s deficiencies and for its final determination, Commerce calculated a period-of-review-wide certification expense ratio without relying on Sahamitr’s reported allocation methods. The final antidumping margin resulted in 13.89%.

Before the Court was plaintiff and plaintiff-intervenor’s motion for judgment on the agency record pursuant to 28 U.S.C. § 1581a(a)(2)(B)(iii) to challenge Commerce’s final determination. According to its jurisdiction under 28 U.S.C. § 1581(c), the Court found that the Agency demonstrated substantial evidence to support its finding. To determine whether merchandise is being dumped in the U.S., the Tariff Act of 1930, as amended, requires Commerce to figure out the product’s “normal value,” 19 U.S.C. § 1677b(a)—the home market price, and then compare that figure to the “export price or constructed export price” at which the product is sold to the importer, (explaining “export price” and “constructed export price”). Under the statute, Commerce is directed to adjust the normal value of such goods by the amount of any difference between that figure and the export price that “is established to the satisfaction” of the agency “to be wholly or partly due . . . differences in the circumstances of sale.” The Court was not persuaded by plaintiff’s argument that the company’s certification expenses was as specific as feasible given the company’s records or by the argument that the company’s recalculation of its expenses was more specific than the period-of-review-wide recalculation Commerce adopted. Plaintiffs argued, and the Court disagreed, that Commerce’s methodology violated 19 C.F.R. §351.401(g)(1)–(2) by choosing a less-specific calculation methodology.

The Court took issue with the fact that plaintiff and plaintiff-intervenor overlooked the statute’s language requiring the party seeking to report expenses to on an allocated basis to do so on as specific basis a feasible because it was Commerce who requested this reporting of plaintiff. Moreover, the Court stated that the Agency has wide discretion as to its development of methodologies used in antidumping cases. Lastly, the Court emphasized that not plaintiff nor plaintiff-intervenor ever addressed the fact that Commerce found the company’s methodology to be distorted and held that the unchallenged determination is supported by substantial evidence because Commerce, by contrast, addressed its contention with specificity, stating the timing differences in the company’s reporting practice. Therefore, the Court denied the motions for judgement on the agency record and sustained Commerce’s final determination.