OAS
BINATIONAL PANEL REVIEW PURSUANT TO THE NORTH AMERICAN FREE TRADE AGREEMENT
ARTICLE 1904


 FINAL DECISION CASE: MEX-USA-00-1904-01

(Continued)

D. ON THE ALLEGED CHANGE OF THE LEGAL STANDING OF THE COMPLAINANT

1. The following topic at issue is, in the opinion of this Binational Panel, the most important issue in this review. The controversy essentially arises from the following reasoning as expressed by the Ministry of Commerce in the Final Determination:

76. At the time of requesting the initiation of the investigation on dumping, [AGROMEX] evidenced its character of national producer of urea, and as a consequence of that [it evidenced], its legal standing for such purpose. However, to the extent that there is not currently -and since several months ago- national production of urea due to the several reasons mentioned in the prior items, it cannot be an affectation to the national production of identical or similar goods, which is an indispensable requisite for the existence of an unfair practice. That is to say, in view that [the petitioner] cannot be considered as a national producer anymore, it looses its legal standing as a plaintiff [legitimación procesal activa], and therefore the investigation is left without subject matter, according to Articles 28, 40, 50 and 51 of the Foreign Trade Law [Ley de Comercio Exterior] and 76 of its Regulations, reason by which, based on Articles 59 section I of the Foreign Trade Law and 83, section II of its Regulations, the following RESOLUTION is hereby issued:

77. The administrative investigation on the matter of unfair international trade practices, on its dumping modality, is hereby terminated without imposing any countervailing duty whatsoever to the imports of urea, product classified in the tariff section 3102.10.01 of the Tariff of the Importation General Tax Law, original from the United States of America and the Russian Federation, in view that the petitioner [AGROMEX] did not evidence during the course of the investigation, the maintenance of its character as national producer, which is a fundamental hypothesis of legal standing as a plaintiff [legitimación procesal activa] on the matter. That is to say, that it does not produce urea, circumstance that causes a material change in its legal situation in this investigation.” Final Determination, Page 107

2. AGROMEX challenged the alleged illegality of the determination by the Ministry of Commerce to conclude the administrative proceeding without assessing definitive countervailing duties whatsoever, based on the reasoning that, upon the issuance of the Final Determination, AGROMEX had lost the character of national producer and that, accordingly, it lacked of the legal standing as plaintiff (legitimación procesal activa) in the administrative investigation.

In general terms, AGROMEX sustains that there are no valid reasoning nor legal grounds (motivación and fundamentación) on which the Ministry of Commerce may have supported its determination to terminate the investigation at issue, based on the alleged lack of legal standing as plaintiff, derived from the undisputed fact that at the time of the issuance of the Final Determination, AGROMEX did not produce urea (and therefore, it could not be considered as a “national producer”). In support to this allegation, AGROMEX points out the fact that the Ministry of Commerce had previously acknowledged its character as national producer, both in the determination by which the investigation was initiated, and the Preliminary Determination.

“According to the transcription of paragraph 75 of the Final Determination at issue, the [Ministry of Commerce], sustains on an unlawful basis that the Complainant does not have the capacity as national producer, without any legal ground or reasoning whatsoever... Such capacity as national producer was fully evidenced... at the corresponding procedural times. The above is fully accepted and validated in the administrative record itself, as it is evidenced by the fact that the [investigating] authority, in both the Determination declaring the initiation of the investigation, and the Preliminary Determination, specifically in item 4 of them, acknowledges the Complainant’s capacity as national producer during the period of review, which is a requirement sine qua non to initiate, continue and conclude a dumping investigation... therefore, since the capacity as national producer was fully evidenced during the period of review, it has no merits, legally speaking, to now conclude unilaterally, on an arbitrary basis and without legal grounds, that the Complainant has lost its character as national producer...” Brief in Response, Pages 17-18

“...the Investigating Authority ... concludes in the absurd sense that in order for the capacity of national producer to exist, a person must be actually producing, which is evidently mistaken. The investigating authority makes such a statement without any legal grounds or reasoning whatsoever... it does not rely on any law provision stating expressly that in order to have the capacity of national producer, one must be actually producing... in this case, the Complainant has the capacity of national producer, since it has with the installed capacity to produce the merchandise at issue... now, the fact that the Complainant is not currently producing, is evidently due to the... injury that the imports under review caused to it... Brief in Response, Pages 19-24

3. The Ministry of Commerce -in the same sense that the participants in opposition to the Complaint of AGROMEX-, argues that the petitioner of an administrative investigation must maintain its capacity as national producer during all the time of the course of the administrative investigation, including the time of issuance of the final determination. The Ministry of Commerce opines that the fact that AGROMEX did not produce urea at the time of the termination of the administrative investigation -besides the undisputed fact that there was no any other national producer, so there was not national production neither-, is a conclusive explanation that, under any circumstance, AGROMEX was or could be considered as a national producer, that is, representative of any national production whatsoever, and therefore, upon the issuance of the Final Determination, it definitively lacked of legal standing as a plaintiff.

Moreover, as for the fact of the inexistence of national production at the time of termination of the administrative investigation, the Ministry of Commerce, particularly in its interventions during the Public Hearing, argued that the inexistence of national production is a determinative factor to conclude that “there is no a legally protected interest (bien jurídico que proteger), fact which lead [the Ministry of Commerce] to the determination of not assessing... countervailing duties..., because such duties have as their purpose the elimination of distortions that may exist within a market as a consequence of an unfair practice, and therefore they may equilibrate it, [because] they are not a punishment nor they can be assessed to protect an inexistent national production.”

“...in the Final Determination published in the DOF on April 17, 2000, it is clearly stated that the [Ministry of Commerce] relied and reasoned its determination on the fact that in the final stage of the investigation, the Complainant did not maintain its capacity as national producer, which is a sine qua non requisite in a review of this nature, and that it would not recover such capacity within the short or medium term... Moreover, items 75 and 76 of the Final Determination... specifically indicate the result derived from the analysis of the information and allegations [provided by the Complainant]. Specifically, item 76 provides the following: [“]... pursuant to Articles 28, 40, 50 and 51 of the Foreign Trade Law and 76 of its Regulations, and based on Articles 59, Section I of the Foreign Trade Law and 83, Section II of its Regulations, the following determination is hereby issued [”]. According to the above, it is clear that the allegation brought by the Complainant that the Determination at issue was not based on any law provisions nor provided any reasoning, it is evidently untrue by making only a simple reference to item 75 of the [Final] Determination, so [that allegation] is groundless, malicious and made only with the intention to create confusion to this Panel... the Complainant says that the capacity of national producer must be maintained only during the period of review... the statement in the sense of limiting [such capacity] only to the period of review is contrary to the spirit and nature of the unfair international trade practices [regime]... as a matter of simple logic, and taking into consideration the meaning of the word producer and production, according to the Dictionary from the Royal Spanish Language and the Encyclopedia of Martín Alonso, it is clear that the capacity of producer may only be maintained by actually producing... The fact of interpreting the phrase “national producer” in such a way that does not describe a person who is actually producing, but a person who produced in the past, would lead to the absurd scenario in which the annual reviews and quarterly tests had no merit nor purpose at all.. the Complainant acknowledges that the capacity of national producer is a sine qua non requisite to initiate, continue and finish a review on unfair international trade practices. Lastly, and just in case the allegations above mentioned were not enough by themselves, it is worth mentioning that the Complainant does no render any information, allegations or evidences to demonstrate that during the investigation it recovered the capacity of national producer...” Brief in Opposition to the Complaint, Pages 39-54 (emphasis in the original).

“...Once the production was absent, the Complainant suffered a change in its legal standing, and therefore the determination of the investigating authority was the only one that it could make, that is to say, to determine that no countervailing duties could be imposed. Moreover, and assuming that the allegation from the Complainant were true, it would lead us to the absurd scenario of leaving without any effect articles such as [Article] 99, first paragraph of the Regulations of the Foreign Trade Law, which provides the reasons upon which countervailing duties may be eliminated if no national production exists: [“]The [Ministry of Commerce] shall review countervailing duties based on the change of circumstances that originated the existence of dumping or subvention, pursuant to Article 68 of the Foreign Trade Law[”]. As a reference of recent determinations in which the corresponding countervailing duties have been eliminated in the absence of national production are the following cases: florfenicol and sulfato de gentamicina (reviews), clorhidrato de procaina and clorhidrato de l-cisteina (product covering cases)...” Brief in Opposition to the Complaint, Page 104

4. The first matter to resolve has to do with the concept of “national producer”. In principle, it is necessary to determine whether such concept does exist within the Foreign Trade Law (Ley de Comercio Exterior) (“LCE”), its Regulations or any other applicable law, as a legal term with a single meaning, whose definition, scope and content is provided by law.

5. Article 40 of the LCE makes reference expressly to the term “national production”. Among other things, it states that for purposes of such law, the term “national production” shall be understood “in the sense of comprising, at least, the 25% of the national production of the merchandise at issue”. The reference to the term “national production” is indispensable in connection with Article 50 of the LCE, which provides the hypothesis for the initiation of an administrative investigation upon the request of a petitioner. In this regard, it provides that “the request by a petitioner may be filed by the producer individuals or legal entities”, and that “petitioners must be representative of the national production, according to Article 40 [of the LCE]...”

Article 60 of the Regulations of the LCE states that “petitioners referred to in Article 50 of the [LCE], must evidence that they represent at least the 25% of the national production of the merchandise at issue.” Article 63 of the above mentioned Regulations, provides among other things that “to determine the existence of injury, the [Ministry of Commerce] must evaluate the impact of the investigated imports on the total national production, or on those national producers whose joint production constitutes the principal part of the total national production of the merchandise at issue... The [Ministry of Commerce] must assure that the determination of the corresponding injury be representative of the situation of the total national production. For such purposes, the [Ministry of Commerce] must gather all necessary information from non-petitioners national producers, and they must submit to the [Ministry of Commerce] all information they are required to produce”.

In view that there are no judicial precedents or any other provisions that may define the concept, the above mentioned provisions may be the clearest expressions of the term “national producer”. Based strictly on the literal expression of law, this Binational Panel realizes, in first place, that the term is used in direct relationship with the representativeness criterion that a person has with respect to what is defined in law as national production.

6. This Binational Panel opines that, within the global context of the LCE, the term “national producer” should not nor cannot be exclusively referred to the persons that in a given time -as may be the time of the issuance of a final determination in an administrative investigation- are actually producing in fact.

It is the opinion of this Binational Panel, as further supported in item 20 of this Decision, that such an statement would lead us to accept that the LCE or in general, the antidumping or countervailing duties related laws in Mexico, do tolerate or encourage the existence of unfair practices that, if they are harmful enough, may have nullified the national producers before the issuance of a final determination in an administrative investigation, which consequently, would apparently leave the Ministry of Commerce with no possibility to sanction the injury caused by such unfair practice.

That does not seem to be the sense of the law. Let us think, for example, in a case involving the Mexican agricultural field. Under the interpretation suggested by the Ministry of Commerce and the participants in opposition to the Complaint of AGROMEX, the Mexican law would be insufficient to duly protect, among others, the agricultural producers, who usually interrupt their production between the end of a season and the beginning of the next one.

Indeed, it is worth mentioning that during the Public Hearing, the representatives of the Ministry of Commerce did acknowledge that the character of national producer may be maintained even if the production is interrupted -as may be the case as a consequence of the existence of international commercial unfair trade practices-

“...I’d like to make it clear that that is not our interpretation. The fact that a company that requests we initiate an investigation stops producing because of unfair trade practices does not mean that the investigation is automatically abandoned for practical purposes. In fact, in the case before us, the point is that the petitioner was unable to demonstrate that it could continue or reinitiate production in the short or medium term and, consequently, maintain the status or constitute the national production that the Mexican antidumping system protects...” Transcription of the Public Hearing, without page (emphasis added)

The Ministry of Commerce further said:

“Yes, it’s a different scenario, but I’d say that the authority would listen to and review the arguments put forward by importers and exporters in order to reach a decision in this hypothetical case. And if it were necessary for the investigating authority to request any other information or carry out any other due diligence in order to make its decision in this hypothetical case, then it would do so. Just as occurred in this case, where the arguments and opinions put forward were heard and evidence was sought as a basis on which to make the decision. So we would insist that the authority’s decision, in this case and in the hypothetical case you are putting to me, was based on this combination of elements, not on the simple fact that production was stopped or suspended...” Transcription of the Public Hearing, without page (emphasis added)

7. In the present case, in the Final Resolution the Ministry of Commerce did not provide adequate legal grounds or reasoning (fundamentación y motivación) to explain why the Complainant “was not a national producer anymore”. An adequate analysis based on the applicable law provisions and reasoning (fundamentación y motivación) requires that, in this case, the Ministry of Commerce explain the legal grounds and rationale for distinguishing the case in which a national producer retains its standing even though it is not producing, and the one in which a national producer ceases to have standing precisely because it is no longer producing.

Accordingly, this Binational Panel opines that an adequate determination of the scope of the term “national producer”, must take into consideration the entirety of elements gathered throughout the course of an administrative investigation with respect to the capacity of a petitioner (or other participants) to produce identical or similar goods to the ones that are the subject matter of the relevant investigation, since such interpretation seems to be according to the express purpose of the LCE as set forth in Article 1 of such law, and on the contrary, an interpretation in other sense seems not to be consistent.

8. Now therefore, the matter on its merits consist of determining whether the Ministry of Commerce did rely on the applicable legal provisions and provide an adequate reasoning to terminate the administrative investigation without assessing any countervailing duty whatsoever, based on the reasoning that AGROMEX had lost, during the course of the investigation, its character as national producer and, as a consequence of that, it lost its “legal standing as a plaintiff”, as well as whether such circumstance may validly cause the termination of the investigation because of “lack of subject matter” of the investigation.

9. In first place, this Binational Panel analyzed the concept of the legal standing of the plaintiff (legitimación procesal activa), in order to determine whether the reasoning expressed by the Ministry of Commerce, and the legal provisions mentioned in the Final Determination, do actually correspond to such feature.

10. In general terms, the nature of the legal standing of the plaintiff, also identified in our legal systems as legal standing ad procesum, is not disputed by the participants. Essentially, all participants agree that the legal standing of the plaintiff or ad procesum corresponds to the ability of a party to a trial to request a jurisdictional entity to resolve a controversy. However, the participants did controvert the scope and the application of such feature in reference to an administrative proceeding on the matter of unfair international trade practices. .

11. AGROMEX sustained in this regard that, in general terms, the legal standing of the plaintiff is necessarily referred to the legal standing that a petitioner must have only at the time of requesting the initiation of an administrative investigation upon the request of such petitioner. In other words, AGROMEX argued that the legal standing of the plaintiff must only be evidenced at the time of the initiation of the investigation, and not during its course.

“...The Investigating Authority erroneously argues that in this case a change of legal standing occurred with respect to the Complainant, allegedly because there was a lack of legal standing as a plaintiff [legitimación procesal activa] ...because the Complainant did not demonstrate during the course of the investigation that it maintained its capacity as national producer, which is allegedly a fundamental hypothesis for a legal standing of plaintiff on this subject, because it did not produce urea anymore... According to paragraph 77 of the determination at issue, it is clear that the investigating authority acted on an unlawful basis, in view that said determination is not duly relied upon any law provision or reasoning that may support it, and is actually limited to state that there is an alleged compliance with a hypothesis of legal standing of a plaintiff on the subject, without making any reference to the alleged law provision in which it is provided what the legal standing on this subject consists of, and if such legal standing may have merits in this particular case. That is to say, the legal standing of a plaintiff, as defined by the investigating authority itself, is a general legal principle, and therefore is not a fundamental hypothesis on the matter, because the legal standing of a plaintiff as such, must be understood as the legal capacity to excite a jurisdictional entity in order for such jurisdictional entity to initiate a trial, circumstance that in the present case was fully evidenced... with the simple fact of admitting the denunciation writ and acknowledging its legal personality, since such facts recognized the existence and demonstration of the legal standing as a plaintiff or ad procesum...” Brief in Support to the Complaint, Pages 30-49.

12. The Ministry of Commerce and the participants in opposition to the Complaint of AGROMEX says otherwise. They say that the legal standing of the plaintiff, because of its very nature, must be evidenced at all times during the course of the investigation, and not only at the time of the request for initiation.

”...it is clear that the Complainant lost its capacity of national producer by the final stage of the investigation, without any possibility to recover it within the short or medium term and, therefore, the legal standing as a plaintiff [legitimación procesal activa]... the legal standing consists of two essential elements: the legal standing of the plaintiff [legitimación procesal activa or ad procesum] and the legal standing regarding the cause itself [legitimación procesal causal or “ad causam”]. The first one is an essential requisite for a trial to initiate and must be evidenced during the whole process... The second one is an essential requisite for the judge to issue a favorable judgment [to the plaintiff]... due to the change on the legal standing of the Complainant by not having demonstrated its capacity as national producer during the final stage of the investigation, the investigating authority correctly applied the concept of legal standing of a plaintiff in its Final Determination...” Brief in Opposition to the Complaint, Pages 57-71

13. In principle, this Binational Panel feels inclined to sustain that the legal standing of the plaintiff, as such, must be maintained at all times during the course of a trial.. However, the opinion of this Binational Panel is that the discussion on the application of the feature of the legal standing of the plaintiff, as argued by the participants, has no sense in relationship with an administrative investigation on the matter of unfair international trade practices, as it is the case at issue.

14. Reasons are several, but all of them have to do with the very nature of, on one hand, what it is known in our legal systems as legal standing of the plaintiff and, on the other one, of the administrative proceeding on the matter of unfair international trade practices.

15. In first place, the concept of legal standing of the plaintiff is necessarily referred to the existence of a trial, that is to say, to rights in dispute to be resolved during the trial. Using the same words that have been employed by the Mexican Supreme Court of Justice in this regard, the legal standing of the plaintiff “occurs when the action is brought in trial by the person who has the ability to assert the right to be disputed...” So it may be read in the following jurisprudence precedent:

“LEGAL STANDING OF A PLAINTIFF [LEGITIMACIÓN PROCESAL ACTIVA]. CONCEPT. The legal standing of a plaintiff is the ability to appear before the jurisdictional entity and be entitled to request the initiation of a trial or an instance. This legal standing is also known as legal standing ad procesum and occurs when the right that is going to be disputed is brought by the person who is entitled to assert such right, different from the legal standing ad causam that implies [that a person has] the title of the disputed right in trial. The legal standing of a plaintiff in the process occurs when the action is brought in trial by the person who has the ability to assert the right to be disputed, whether because he/she presents himself/herself as the holder of such right, whether because he/she has the legal representation of the holder. The legal standing ad procesum is a requisite for the trial to develop, while the [legal standing] ad causam, is [a requisite] to obtain a favorable judgment.

Tax Review 80/83. Seguros América Banamex, S.A. October 17, 1984. Four Votes Unanimity. Absent: Eduardo Langle Martínez. Speaker: Carlos of the Río Rodríguez. Secretary: Diana Bernal Ladrón de Guevara.

Amparo in Review (Complaint) 1873/84. Francisco Toscano Castro. May 15, 1985. Four Votes Unanimity. Absent: Fausta Moreno Flores. Speaker: Carlos de Silva Nava. Secretary: Jorge Mario Montellano Díaz.

Complaint 11/85. Timoteo Peralta et.al. November 25, 1985. Four Votes Unanimity. Absent: Manuel Gutiérrez de Velasco. Speaker: Carlos de Silva Nava. Secretary: Jorge Mario Montellano Díaz.

Amparo in Review 6659/85. Epifanio Serrano et.al. January 22, 1986. Five Votes. Speaker: Carlos de Silva Nava. Secretary: Jorge Mario Montellano Díaz.

Amparo in review 1947/97. Néstor Faustino Luna Juárez. October 17, 1997. Five Votes. Speaker: Sergio Salvador Aguirre Anguiano. Secretary: Adela Domínguez Salazar.

Jurisprudence Resolution 75/97. Approved by the Second Courthouse, Supreme Court of Justice, Private Session of December 3, 1997, Five Votes Unanimity, Justices Juan Díaz Romero, Mariano Azuela Güitrón, Sergio Salvador Aguirre Anguiano, Guillermo I. Ortíz Mayagoitia and Chairman Genaro David Góngora Pimentel.

Ninth Epoch; Second Courthouse, Supreme Court of Justice, Weekly Federal Judiciary Gazette, Volume VII, January, 1998; Resolution: 2a./J. 75/97, Page 351” (emphasis added)

16. Now hence, the nature of the administrative investigation on the matter of unfair international trade practices is not the same than the one of a trial. There is no controversy whatsoever, nor there is an investigation followed under the form of a trial (in which the Ministry of Commerce acts with a jurisdictional function, or even lesser, as a party). The Ministry of Commerce acts strictly in compliance with attributes of administrative nature that do not create rights to persons.

17. This matter is essential. In a trial, there is a right (or alleged right) of a person that will be disputed in trial. In protection of principles of procedural economy and legal certainty, inter alia, there is an evident interest that the person who brought the action be the person legally able to act during the whole course of the trial, because his/her right (or alleged right) is precisely the subject matter of such trial, with respect to which the controversy will be resolved (whether declared or constituted).

18. On the contrary, in the administrative investigation on the matter of unfair international trade practices, which may be even initiated ex officio, there are no particular rights in dispute. It may certainly happen that the investigation begins upon the request of a petitioner, but that does not mean that such petitioner becomes a “party” to the investigation, in the sense that such investigation becomes a sort of trial, or in the sense that any rights of the petitioner be in dispute, or that based on such rights a controversy must be resolved.2

In support of the above, the federal Courts have pointed out, as evidenced in the following precedent that an administrative investigation on the matter of unfair international trade practices has a nature of public policy, in which there are not plaintiffs and respondents (and therefore, it cannot be said there is a legal standing of the plaintiff).

“COUNTERVAILING DUTIES DETERMINED BY THE MINISTRY OF COMMERCE AND INDUSTRIAL DEVELOPMENT UPON THE ISSUANCE OF FINAL DETERMINATIONS IN THE ADMINISTRATIVE INVESTIGATION ON UNFAIR INTERNATIONAL COMMERCIAL PRACTICES. THEY ARE OF GENERAL APPLICATION FOR ALL IMPORTERS OR CONSIGNEES OF THE MERCHANDISE REFERRED BY THE MINISTRY OF COMMERCE IN THE RELEVANT DETERMINATION, REGARDLESS THAT THEY HAD INTERVENED OR NOT IN THE RESPECTIVE INVESTIGATION. The countervailing duties referred to in the [LCE], are applied once the administrative investigation on the matter of unfair international trade practices have taken place, which may be initiated ex officio or upon the request of a petitioner, as provided by Article 49 of such law; so, the investigation on unfair international trade practices is regulated by Articles 49 to 60, wherein is regulated the time of initiation of the investigation, and the time of termination, upon which the final determination may resolve the assessment of countervailing duties in provisional manner (Article 57), or determining definitive countervailing duties, and such resolution may even revoke provisional countervailing duties, or declaring the termination of the investigation without imposing any countervailing duties (Article 59). Moreover, pursuant to Article 89 of the [LCE], the countervailing duties determined by the [Ministry of Commerce] are mandatory as of the day following the date of publication in the [DOF]; accordingly, as from such date, all importers and consignees shall be obliged to calculate in the corresponding importation request, the amount of provisional or definitive duties, that shall pay along with the taxes applicable to foreign trade. This circumstance evidences that the countervailing duties determined by the [Ministry of Commerce], once that they have been issued in a final determination in an administrative investigation on unfair trade practices, are mandatory for all importers or consignees of the merchandise that is subject to the final determination, that is published in the [DOF]; therefore, it is irrelevant that the particular to which these countervailing duties are applied, has participated or not in the relevant investigation, in view that as mentioned, Article 89 of the [LCE] is conclusive when it provides that importers or their consignees shall apply themselves the mentioned duties, without prejudice that the customs authorities may otherwise apply them. The above is strengthened by the fact that the investigation on unfair international trade practices performed by the [Ministry of Commerce] is not a proceeding to "resolve particular cases", but it is an investigation of public interest whose purpose is the protection of the national production in front of unfair practices that may result injurious for the same, by means of this investigation and the assessment of countervailing duties, it is protected the interests of all producers and not any particular rights, and because of that there are no plaintiffs or respondents, but the proceeding may be initiated upon request of a petitioner or ex officio.

COLLEGIATE COURT ON ADMINISTRATIVE MATTERS, SIXTH CIRCUIT.

Tax Review 393/99. Under-Administrator, Contentious Department "1" of the State Income Administration Office, Puebla. July 6, 2000. Unanimity. Speaker: Francisco Javier Cárdenas Ramírez. Secretary: Luz Idalia Osorio Rojas.

Ninth Epoch, Collegiate Court on Administrative Matters, Sixth Circuit, Federal Weekly Judiciary Gazette, Volume XII, September, 2000, Resolution VI.A. 79 A, Page 736” (emphasis added)

19. In any event, and based on the above, it becomes clear that the requisite of certain percentage to be considered as a person representative of the national production, as required by the LCE and its Regulations, could be referred to as -if there is any need to classify it- as a requisite to proceed, that is to say, as a simple requirement to initiate the investigation upon the request of a petitioner.

This is so true, that the Mexican courts have explicitly sustained, in several resolutions, the independence of the request to initiate the investigation on the matter of unfair international trade practices, with respect to the investigation itself.

According to the interpretation of the federal courts, the petitioner is, to the greatest extent, just a coadjutant of the investigation -so this situation implies that he/she has an adjective right to provide information and render evidences-, but in no way such petitioner may be considered as a “party” -within the meaning of a trial-, whose rights are in dispute, or upon which depends, in any manner whatsoever, the development and the termination of the investigation itself. This is supported by the following precedent:

“MINISTRY OF COMMERCE AND INDUSTRIAL DEVELOPMENT. AMPARO HAS NO MERITS AGAINST FINAL DETERMINATIONS ISSUED BY, ON DUMPING. APPLICATION OF SECTION V, ARTICULE 73 OF THE AMPARO LAW. When final determinations issued by the [Ministry of Commerce] on dumping are challenged through the amparo trial, including violations to the respective administrative investigation, such trial has not merits, because such final determinations do not affect the legal sphere of particulars. That is so by reading the relevant articles of the [LCE] and its Regulations in connection with the subject matter at issue, according to which it is clear that such provisions provide, with respect to an investigation on unfair international trade practices, and administrative proceeding in which the petitioners act only as such, because while it is true that Articles. 10 of the [former] Ley Reglamentaria del Artículo 131 Constitucional en Materia de Comercio Exterior and 13 of its Regulations Against Unfair International Commercial Practices require that the individuals or legal entities producers of identical or similar goods to those that are being imported or intend to be imported, do represent at least the 25% of the national production of such merchandise, they may petition for the [Ministry of Commerce] [to investigate] the facts that may constitute dumping, and that Article 27 of the above mentioned Regulations provides that during the period of the investigation, the parties who have evidenced their interest in the results may render and submit all type of evidence except for the confessions or those against the public order or the good customs, but that does not mean that the participation of the petitioners in any way creates in their favor any right to the assessment of a countervailing duty, and even less that such countervailing duty may generate a right or benefit whatsoever for a petitioner to feel affected by its modification; on the contrary, it is a procedure in which the [Ministry of Commerce], whether ex officio or upon the request of a petitioner, is the only one in charge of investigating and determining the existence or inexistence of dumping, that is, of the unfair international commercial practice consisting of the importation to the domestic market of foreign merchandise at a lower price to their normal value; it must be said that the original intention of the Congress, upon the issuance of the relevant law, was not to favor particular interests of a determined individual or legal entity, but to regulate and promote the foreign trade, the national economy, the stability of the national production or the performance of any other similar purpose for the benefit (of the country), as provided for in Article 1o. of the Ley Reglamentaria del Artículo 131 Constitucional en Materia de Comercio Exterior. It is so true that the role of a petitioner is only as such, that once that a request has been filed (whether it has been accepted in all its terms or if it has been remanded for clarification), [the Ministry of Commerce] is devoted to perform the respective administrative investigation, in order for which, within a term of five working days, issues a provisional determination, if so is applicable, imposing the provisional countervailing duty (Article 11); within the term of thirty days counted as from the date on which the provisional determination is effective, this may be confirmed, modified or revoked as applicable; it declares the initiation of the investigation; receive evidence and orders the rendering of any other evidence applicable and, finally, issues a final determination (Articles 12 and 13). Therefore, the fact that the provisions from which derives the act that is being challenged, specifically Articles 13 of the law and 27 of the Regulations provide that the petitioners may render all type of evidence except for those prohibited, do only mean that such individuals or legal entities act, in any event, as coadjutants of the investigating authorities in order for it to determine whether a dumping practice exists or not. In view of the above, it is clear that the fact that the investigating authority admit evidences, based on what is provided by the law, does not affect the plaintiff, since the now petitioner, now plaintiff in this trial, was only limited to make aware the investigating authority the facts that it considered to constitute an unfair practice.... Another additional element confirming the criterion that final determinations on dumping do not affect the legal standing of petitioners, is the one related to the nature of the countervailing duties imposed by the authority, which in principle are a contribution imposed to individuals or legal entities who import merchandise into the national territory under unfair international trade practices (Article 35, Section I, item c, of the Customs Law), and whose purpose is to punish, prevent or dissuade imports under such unfair trade practices, besides to the fact that they are applicable independently of the tax tariff that may correspond to the merchandise at issue, therefore being a regulatory or restrictive measure to the importation of products, because they are intended to protect the stability of the national production, and prevent the establishment of new industries or the development of the already existing ones (Articles 1st and 8th of the Law). Therefore, it is evident that the attribution to impose countervailing duties and their collection, are own and exclusive attributions to the Government, and not to particulars, so their modification, revocation or confirmation is an act which only affects to the Government itself, or in any event, to the importers of merchandise under an unfair trade practice, because they are over whom the relevant countervailing duty is imposed, but in no way to the national producers in view of the mentioned above.

FOURTH COLLEGIATE COURT ON ADMINISTRATIVE MATTERS, FIRST CIRCUIT.

Amparo in Review 334/92. Fibras Sintéticas, S. A. de C. V. May 14, 1992. Unanimity. Speaker: José Méndez Calderón. Secretary: Benito Alva Zenteno.

Eight Epoch, Fourth Collegiate Court on Administrative Matters, First Circuit, Federal Weekly Judiciary Gazette, Volume X, December, 1992, Page 363.” (emphasis added)

20. Based on the above, this Binational Panel does not agree with the participants in opposition to the Complaint de AGROMEX, that the lack of the character of national producer by AGROMEX -that according to the Ministry of Commerce, causes the lack of its “legal standing as a plaintiff”- upon the issuance of the Final Determination at issue, may indeed be any of the hypotheses set forth in the law provisions mentioned in the Final Determination at issue, upon which the Ministry of Commerce allegedly grounded the Final Determination, or that in any other manner, such circumstance may leave the investigation “without subject matter”.

21. Moreover, this Binational Panel is also aware of several statements from the Ministry of Commerce during this review, in the sense that “to the extent that there was not national production upon the issuance of the Final Determination, there was no a legally protected interest”, as well as the allegations that such statement is supported in the alleged impossibility of the petitioner -actual or not, demonstrable or not- of producing again “within the short or medium term”, as argued by the Ministry of Commerce during the Public Hearing:

“...it is worth mentioning that the investigating authority at the time of issuing its final determination could not impose countervailing duties on a product that was not produced in the country and with respect to which there were no indications that it would be produced within the short or medium term.” Transcription of the Public Hearing, without page

As same as the allegation on the “legal standing of the plaintiff” on an administrative investigation on unfair international trade practices, this Binational Panel has found no law provisions whatsoever upon which it may be grounded any of the above mentioned allegations, in the sense that the national production must actually exist at the very time of the issuance of a final determination following an investigation on the matter of unfair international trade practices, or in the sense that its termination depends on the possibility of a petitioner to produce or not the merchandise at issue, within the short, medium or any other term.

Indeed, the sole suggestion that an investigation may be terminated based on the possibility or impossibility of a petitioner to produce, seems to imply that the outcome of the investigation depends on a substantive right of such petitioner. As mentioned before, there is no such right in favor of any participant.

Furthermore, the concept of “national production” may certainly have time content (it may be certainly said that the national production is the existing one). But however, there is no law provision whatsoever in the LCE, its Regulations or any other law, to the best knowledge of this Binational Panel, according to which the injury or threat of injury associated to an unfair commercial practice must be caused, have caused or continue be causing, yet, during or at the very same time of the issuance of a final resolution resulting from an investigation on the matter of unfair international trade practices, in order for the Ministry of Commerce to be able to assess countervailing duties to the imports that had caused the injury or the threat of injury.

Actually, the allegation of the Ministry of Commerce may be reduced to such extreme, by stating that if there is not national production at the very same time of the issuance of the final resolution, there is not a legally protected interest, and therefore no countervailing duty may be imposed.

This reasoning is dangerous itself, not only because there is no law provision to support it -only by reading the Article 1 of the LCE, it becomes clear that the purpose of the LCE is far broader than the mere protection of the existing national production-, but also because such argument would be equal to the notion that if an unfair international commercial practice is carried out in such an effective manner that could exterminate the national production during the course of an administrative investigation, but before the issuance of the final determination, that would be sufficient to definitively retain the domestic market, and also sufficient to avoid any future possibility of being imposed with countervailing duties in the interest of new domestic industry, protected by the technicality that “upon the termination of the administrative investigation, there was not national production (to protect) anymore.”

Again, according to the precedent recently mentioned above, the federal courts have interpreted that the administrative investigations on the matter of unfair international trade practices, are conducted not only to protect the existing national production, but also the future industry.

“MINISTRY OF COMMERCE AND INDUSTRIAL DEVELOPMENT. AMPARO HAS NO MERITS AGAINST FINAL DETERMINATIONS ISSUED BY, ON DUMPING. APPLICATION OF SECTION V, ARTICULE 73 OF THE AMPARO LAW. ... Another additional element confirming the criterion that final determinations on dumping do not affect the legal standing of petitioners, is the one related to the nature of the countervailing duties imposed by the authority, which in principle

are a contribution imposed to individuals or legal entities who import merchandise into the national territory under unfair international trade practices (Article 35, Section I, item c, of the Customs Law), and whose purpose is to punish, prevent or dissuade imports under such unfair trade practices, besides to the fact that they are applicable independently of the tax tariff that may correspond to the merchandise at issue, therefore being a regulatory or restrictive measure to the importation of products, because they are intended to protect the stability of the national production, and prevent the establishment of new industries or the development of the already existing ones (Articles 1st and 8th of the Law)...

FOURTH COLLEGIATE COURT ON ADMINISTRATIVE MATTERS, FIRST CIRCUIT.

Amparo in Review 334/92. Fibras Sintéticas, S. A. de C. V. May 14, 1992. Unanimity. Speaker: José Méndez Calderón. Secretary: Benito Alva Zenteno.

Eight Epoch, Fourth Collegiate Court on Administrative Matters, First Circuit, Federal Weekly Judiciary Gazette, Volume X, December, 1992, Page 363.” (emphasis added)

22. Based on the above, this Binational Panel finds merits on the claim at issue, in the sense that the Final Determination lacks of reasoning and legal grounds to support the Ministry of Commerce’s determination to terminate the administrative investigation on the basis that such investigation was allegedly left “without subject matter”, derived from circumstances due to the petitioner, including the alleged lack of “legal standing of the plaintiff” by the time of the issuance of the Final Determination, circumstance which affected the defense of Complainant and affected the sense of the resolution, in violation to Article 238, section II of the CFF.



Notes:

2 It is worth mentioning that the Foreign Trade Law makes reference to “interested parties” to an antidumping investigation. However, as supported in this Decision, such terminology does not imply in any manner whatsoever that a petitioner becomes a “party” -in the sense of a trial, being in dispute a right of such petitioner-.
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