D. Whether Commerce Properly Denied An Adjustment To CDC's U.S. Indirect Selling Expenses For Interest Allegedly Incurred In Financing Cash Deposits For Antidumping Duties

During the seventh administrative review, CDC claimed a downward adjustment to its reported U.S. indirect selling expenses for interest allegedly incurred in financing cash deposits for antidumping duties. In its Final Determination, Commerce denied CDC such an adjustment, stating that the denial was consistent with Commerce's analysis of such expenses in the sixth administrative review and the agency's practice as described in Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from France, et al., 62 Fed. Reg. 54043, 54079 (October 17, 1997). See Final Determination, 64 Fed. Reg. at 13163. In denying CDC the adjustment, Commerce adopted its discussion with respect to this issue set forth in its Sixth Review Final Results, 63 Fed. Reg. 12764 (March 16, 1998). In that review, Commerce noted that the antidumping statute did not contain a precise definition of what constitutes a selling expense. 63 Fed. Reg. at 12782. Instead, Commerce observed that Congress gave it discretion to determine what constitutes a selling expense, and that it was a matter of policy whether Commerce considered there to be any financing expenses associated with cash deposits. Id.

Commerce reasoned that there is a distinction between "business expenses that arise from economic activities in the United States and business expenses that are direct, inevitable consequences of the dumping order," and that an adjustment should only be made for business expenses that are direct, inevitable consequences of the dumping order. Id. Financial expenses, Commerce explained, were not a direct, inevitable consequence of an antidumping order, stating:

Money is fungible. If an importer acquires a loan to cover one operating cost, that may simply mean that it will not be necessary to borrow money to cover a different operating cost. Companies may choose to meet obligations for cash deposits in a variety of ways that rely on existing capital resources or that require raising new resources through debt or equity. For example, companies may choose to pay deposits by using cash on hand, obtaining loans, increasing sales revenues, or raising capital through the sale of equity shares. In fact, companies face these choices every day regarding all their expenses and financial obligations. There is nothing inevitable about a company having to finance cash deposits and there is no way for the [DOC] to trace the motivation or use of such funds, even if it were.

Id. Based on this rationale, Commerce determined that there was no basis by which to reduce the pool of indirect selling expenses reported to it.

Commerce also determined that it should not use an imputed amount that would theoretically be associated with financing of cash deposits. Id. at 12783. Commerce reasoned that "[t]here is no real opportunity cost associated with cash deposits when the paying of such deposits is a precondition for doing business in the United States . . . . Companies cannot choose not to pay cash deposits if they want to import nor can they dictate the terms, conditions, or timing of such payments." Id.

CDC claims that Commerce's decision to deny an adjustment to CDC's U.S. indirect selling expenses for interest allegedly incurred in financing cash deposits for antidumping duties was contrary to its prior decisions as well as the decisions of the CIT upholding such adjustments. CDC's May 21, 2001, Rule 57(1) Brief, at 50.

CDC asserts that in its prior decisions, Commerce allowed an adjustment for interest allegedly incurred in financing cash deposits for antidumping duties, and that Commerce noted that such interest expenses were incurred "as a result of the need to pay antidumping duty cash deposits" and thus "were incurred only because of the existence of the antidumping duty order." Id. at 50 (citing Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof from Japan ("TRBs"), 62 Fed. Reg. 11826, 11830 (March 13, 1997)). Further, CDC claims that Commerce stated that "it has been our long-standing practice to not treat expenses related to antidumping proceedings as selling expenses," and that since these expenses are not "incurred in the selling of the subject merchandise," Commerce reasoned that under the statute they should not be deducted from constructed export price. CDC's May 21, 2001, Rule 57(1) Brief, at 50-51. Further, CDC notes that Commerce stated that it was fair to permit the adjustment to compensate companies for the "opportunity cost" associated with financing cash deposits. Id. at 51. CDC argues that because the payment of cash deposits can be financed in a number of different ways, making it difficult to trace the actual cost of financing such expenses, Commerce previously has allowed the adjustment regardless of how it is financed, as Commerce has recognized that a company incurs a real expense whether it actually has obtained loans or has diverted funds from other investment activity to finance the antidumping cash deposits and imputed these costs for purposes of reporting the expense to Commerce. Id. at 55-56. In either situation, CDC argues, there is an opportunity cost associated with financing cash deposits. Id. at 56.

CDC also asserts that until a recent decision, NTN Bearing Corp. v. United States, 104 F. Supp. 2d 110, 138 (Ct. Int'l Trade 2000), the CIT consistently supported the position that Commerce should allow an adjustment to CDC's indirect selling expenses for the interest allegedly incurred in financing cash deposits for antidumping duties, and in cases in which it reviewed Commerce's decision to accept or reject the adjustment, the CIT had approved the use of the adjustment either by upholding Commerce's decisions to grant the adjustment, or by remanding Commerce's decisions to deny the adjustment. Id. at 52. In the NTN Bearing case, CDC notes that the CIT found that Commerce "acted rationally in denying NTN's claimed interest-expense adjustment and, therefore, [Commerce's] determination is sustained." Id. CDC, however, dismisses the NTN Bearing case by noting that the case has been appealed to the Federal Circuit, which has not had an opportunity to make a ruling that would bind this Panel. Id. at 56.

Commerce argues that it properly denied an adjustment to CDC's U.S. indirect selling expenses for interest allegedly incurred in financing cash deposits for antidumping duties. Commerce's November Rule 56(2) Brief, at 93. Commerce, citing the TRBs case, recognizes that it had previously allowed for this adjustment. Id. at 95. More recently, however, Commerce notes that it has revised its practice to deny this adjustment, thereby having the effect of not reducing the pool of indirect selling expenses for imputed financing expenses associated with payment of cash deposits from U.S. price. Id. The basis for Commerce's revised practice is that Commerce now distinguishes between business expenses that are a direct, inevitable consequence of an antidumping duty order (which Commerce allows an adjustment for) and business expenses that arise from economic activities in the United States (which Commerce does not allow an adjustment for), and that since, according to Commerce, there is nothing inevitable about a company having to finance cash deposits, Commerce should not allow an adjustment for the financing of cash deposits. Id. at 99.

Commerce notes that the CIT has recognized that Commerce is allowed to change its policy, as long as it presents a reasonable rationale for its departure from its prior practice, Id. at 98 (citing Timken Co. v. United States, 989 F. Supp. 234, 250 (Ct. Int'l Trade 1997), vacated in part on other grounds, 1 F. Supp. 2d 1390, 1393 (Ct. Int'l Trade 1998)), and believes that in the Final Determination in this case it did so. Id. at 99 (citing Seventh Review Final Results, 64 Fed. Reg. at 13163 (adopting the discussion set forth in the Sixth Review Final Results, 63 Fed. Reg. at 12782)).

STCC asserts that Commerce is entitled to apply its current policy of denying an adjustment for the financing of cash deposits to the facts of this case. STCC's November 19, 2001, Rule 57(2) Brief, at 148. STCC recognizes that Commerce had, in the past, allowed for an adjustment for the financing of cash deposits, but that a federal agency, such as Commerce, may change its interpretation and application of a statute and regulation as long as the new interpretation and application are consistent with the legislative intent and are reasonably explained. Id. at 149. In addition, STCC points out that that CIT has recognized that "there is no rule of administrative stare decisis." Id. at 149 (quoting Toyota Motor Sales, U.S.A., Inc. v. United States, 585 F. Supp. 649 (Ct. Int'l Trade 1984)).

STCC also claims that Commerce has no statutory basis to make an adjustment to indirect selling expenses for interest allegedly incurred in financing cash deposits, STCC's November 19, 2001, Rule 57(2) Brief, at 143, and that its denial of an adjustment for financing cash deposits is consistent with both federal statutes and regulations. Id. at 150. According to STCC, if Commerce allowed an adjustment for the financing of cash deposits, then there would be an upward adjustment to export price and constructed export price in every instance that cash deposits were financed. Id. at 151. However, STCC points out that the statute that sets forth the required upward adjustments to export price and constructed export price - 19 U.S.C. � 1677a(c) - makes no reference to cash deposit financing expenses. Id. at 151. STCC asserts that the Federal Circuit "has recognized the basic principle of statutory construction that a statutory enumeration of specific terms - without qualifying language - tends to indicate a legislative intent to exclude all non-enumerated items." Id. at 152. Thus, according to STCC, the fact that certain upward adjustments to export price and constructed export price are listed in 19 U.S.C. � 1677a(c) indicates that other upward adjustments - such as an upward adjustment for financing of cash deposits - were not intended by Congress. Id.

The statutory provisions at issue - 19 U.S.C. � 1677a(c) & (d) - do not provide clear guidance with respect to whether there can be an adjustment for interest allegedly incurred in financing cash deposits for antidumping duties. In light of the considerable deference we must afford to Commerce's expertise in administering the antidumping law, the issue for this binational panel is whether Commerce's statutory interpretation is a permissible construction of the statute. Steel Auth. of India, Ltd. v. United States, 146 F. Supp. 2d 900, 905 (Ct. Int'l Trade 2001). We hold that it is, and that Commerce reasonably interpreted the statutory provisions at issue by distinguishing between (a) business expenses that are a direct, inevitable consequence of an antidumping duty order, and (b) business expenses that arise from economic activities in the United States, and finding that having to finance cash deposits falls within the former category. We also find that, with respect to imputed interest costs, Commerce reasonably interpreted the statutory provisions at issue in concluding that there is no real opportunity cost associated with cash deposits when the paying of such deposits is a precondition for doing business in the United States. More importantly, that Commerce has changed its practice does not detract from the reasonableness of Commerce's current statutory interpretation. As the CIT recently noted:

[A]n agency must be allowed to assess the wisdom of its policy on a continuing basis. Under the Chevron scheme, agency discretion to reconsider policies is inalienable . . . Any assumption that Congress intended to freeze an administrative interpretation of a statute would be entirely contrary to the concept of Chevron which assumes and approves of the ability of administrative agencies to change their interpretations.

Koyo Seiko Co., Ltd. v. United States, 2002 Ct. Intl. Trade LEXIS 10, slip op. 2002-11 (February 1, 2002).

We note that this binational panel decision is in accord with the three most recent CIT decisions considering this issue. See Koyo Seiko Co., Ltd. v. United States, 2002 Ct. Intl. Trade LEXIS 10; slip op. 2002-11 (Ct. Int'l Trade February 1, 2002); NTN Bearing Corp. v. United States, 2002 Ct. Intl. Trade LEXIS 8; slip op. 2002-07 (Ct. Int'l Trade January 24, 2002); and NTN Bearing Corp. v. United States, 155 F. Supp. 2d 715 (Ct. Int'l Trade 2001).⁶

Based on the foregoing, Commerce properly denied an adjustment to CDC's U.S. indirect selling expenses for interest allegedly incurred in financing cash deposits for antidumping duties. Accordingly, Commerce's determination is affirmed.

E. Whether Commerce Properly Determined To Resort To Partial Adverse Facts Available For CEMEX's Data From The Hidalgo Plant Rather Than Total Adverse Facts Available For CEMEX's Entire Response

With the exception of the reported Hidalgo plant sales and the DIFMER information, Commerce accepted CEMEX's timely reported information, subsequently verified it, and did not resort to total adverse facts available. Instead, Commerce chose to employ partial adverse facts available where necessary, to supplement CEMEX's information, in the determination of the dumping margin. This part of the opinion will address the facts available issue, in the context of the Hidalgo plant sales. The DIFMER issue is subsequently addressed at 96-100.

While Commerce was able to verify most of CEMEX's timely submitted information, it found CEMEX's initially reported information on the Hidalgo plant sales wanting and then rejected CEMEX's subsequently submitted information in this regard. In this context, Commerce made several findings which led it to apply partial adverse facts available regarding the Hidalgo plant sales. Commerce found that CEMEX provided information regarding the Hidalgo sales in an untimely manner and that this fact precluded Commerce from verifying this information. As such, Commerce used facts otherwise available under section 19 U.S.C. � 1677e(a). In addition, it noted that the nature and timing of CEMEX's cancellation of the verification was unprecedented and concluded that CEMEX did not act to the best of its abilities to provide timely and accurate information. As such, it used an adverse inference to determine facts otherwise available under 19 U.S.C. � 1677e(b). Therefore, pursuant to 19 U.S.C. � 1677e(d), Commerce used partial adverse facts available to establish the normal value of CEMEX's Hidalgo sales in the home market. In so doing, Commerce substituted the highest calculated normal value in this review for all home market sales of cement produced at Hidalgo. See Final Determination, 64 Fed. Reg. at 13152-53.

In disagreement with STCC, Commerce did not use total adverse facts available in determining a margin. CEMEX's margin of dumping was based on information which was, for the most part, timely submitted by CEMEX and verified by Commerce. Where necessary, this information was supplemented by Commerce using partial adverse facts available. In coming to this conclusion, Commerce claims to have considered several factors. It claimed to have looked at CEMEX's overall degree of cooperation and what it found to be the small proportion of home market sales affected by CEMEX's conduct. Commerce determined that despite some delay, it was able to verify, with the exception of the Hidalgo sales, CEMEX's timely reported data and complete the review within the time limits prescribed by law.

Commerce concluded that in applying the highest calculated normal value to all Hidalgo sales, it would apply facts available in a sufficiently adverse fashion. Commerce noted that its decision establishes a margin which is supported by the record and is adverse to CEMEX's interests, in accordance with the guidance found in the Statement of Administrative Action ("SAA"), Agreement on Implementation of Article VI of the GATT and 19 U.S.C. � 1677e(a). 64 Fed. Reg. at 13148.

CEMEX argues that in the Final Determination, Commerce correctly relied on its reported and verified information and correctly resorted to partial rather total adverse facts available for CEMEX's data from the Hidalgo plant. CEMEX contends that Commerce's Final Determination, in this regard, was in accordance with law and supported by substantial evidence.

CEMEX claims that the decision of Commerce to use partial adverse facts was in accordance with law on account that both the governing statute - 19 U.S.C. �1677e(b)- and the implementing regulation - 19 C.F.R. �351.308 - are silent as to whether Commerce must use partial or total facts available. CEMEX reasons that the silence is evidence of a legislative intent that this decision is left to Commerce's discretion.

CEMEX cites various cases for the proposition that Commerce has full authority to apply either total or partial facts available, depending on the circumstances of each case. CEMEX argues that the courts have upheld Commerce's policy of applying total facts available only in cases where the respondent submits no evidence or unreliable evidence. CEMEX, furthermore, argues that since it submitted the bulk of the evidence, which was verified, the use of partial adverse facts was a reasonable interpretation of the statute.

CEMEX claims that the use of partial adverse facts in these circumstances is consistent with the directive from the SAA that accompanied the URAA and the statutory purpose of antidumping law. CEMEX alleges that the SAA directs Commerce to use partial facts available to fill �gaps in the record due to the deficient submissions or other causes�. CEMEX's November 19, 2001, Rule 57(2) Brief, at 11-12 (quoting H.R. Rep. No. 103-826, at 869 (1994)). CEMEX further argues that the statutory purpose of the antidumping law is to calculate antidumping duty margins as accurately as possible and that Commerce's use of partial facts available and CEMEX's verified information met this objective. Id. at 12. CEMEX argues that Commerce's selection of adverse partial facts available for the missing Hidalgo information was supported by substantial evidence on the record. CEMEX also contends that these factual determinations are to be made on an individual case basis and that the courts have shown great deference to Commerce in this context. CEMEX further alleges that in this case, there is sufficient relevant evidence as a reasonable mind might accept as adequate to support the conclusion and therefore urges this Panel to not reweigh the evidence or substitute its judgment for that of Commerce. Id. at 13-14.

CEMEX claims that each of the four reasons cited by Commerce for rejecting the use of total adverse facts available is supported by substantial evidence and in accordance with Commerce's statutory and regulatory responsibilities. Id. at 15. First, CEMEX claims that the record shows that, overall, CEMEX was a �reasonably cooperative participant� in this review, reporting a great deal of information which was, for the most part, verified and found not to have major discrepancies. CEMEX argues that, as neither the statute nor the regulations require perfection, its actions in this review meet the cooperative standard. CEMEX also argues that while allegations of non-cooperation in other reviews are, strictly speaking, irrelevant, they nonetheless evidence an overall level of cooperation. Id. at 16-17.

Second, CEMEX argues that only a very small volume of home market sales was affected by the misreported data. Id. at 17. Thirdly, CEMEX contends that Commerce did, in fact, verify CEMEX's timely submitted data. Id. at 18. Fourthly, CEMEX alleges that Commerce was able to complete its preliminary and final determinations within the statutory and regulatory timelines. Id. CEMEX further argues that Commerce had the resources and expertise to ensure that the verification and other aspects of the review were thoroughly confirmed.

CEMEX submits that Commerce's determination was correct in the circumstances because it sufficiently punished CEMEX's misreporting by applying the highest calculated normal value in this review to all Hidalgo sales and not just the �small number that were inadvertently misclassified.� Id. at 20.

In short, CEMEX argues that the situation requiring the application of total adverse facts - gross misreporting, inability to verify and providing purposeful misleading data - are not found in this record. Id. at 18-22.

STCC takes issue with Commerce's application of partial adverse facts available and argues that, under the circumstances, Commerce should have discarded all of the information submitted by CEMEX and should have applied total adverse facts in calculating the margin of dumping rate. In essence, STCC claims that Commerce's decision, in this regard, is not sufficiently adverse to CEMEX's interests. STCC would have Commerce apply total adverse facts which would substantially increase CEMEX's margin of dumping rate.

STCC claims that, given the circumstances, Commerce should have used total adverse facts available to effectuate the purpose of 19 U.S.C. � 1677e(b) which is to provide timely, complete and accurate responses to Commerce's questionnaires. STCC contends that Commerce should have rejected all the information submitted by CEMEX. STCC argues that this more severe measure was justified as a result of the deficiencies in CEMEX's responses in the present review, and in the context of its behavior in the prior reviews.

STCC claims that CEMEX had persistently, both in the instant review and in the prior ones, supplied inaccurate and at times misleading information and had not been cooperative. It argues that during the present review CEMEX �falsely� claimed that it only produced Type V cement at the Campana and Yaqui plants and that CEMEX took the �unprecedented� step of unilaterally canceling, at the last minute, a planned verification so that it could �highjack� the investigation. It also argues that CEMEX was similarly uncooperative in supplying the requested information in the DIFMER issue. STCC contends that nothing in the U.S. antidumping statute forbids Commerce to take into account the respondent�s actions in prior proceedings and Commerce�s own findings in those proceedings. STCC's December 14, 2001, Rule 57(3) Brief, at 6-7, 7 n.2. STCC concludes its argument by saying that �Given CEMEX's extraordinary lack of cooperation in the seventh review and its similar failure to cooperate in earlier reviews, Commerce�s failure to rely on total facts available in the seventh review failed to effectuate the purpose of 19 U.S.C. � 1677e(b), which is to induce respondents to provide timely, complete, and accurate responses to Commerce�s information requests.� Id. at 6.

STCC also takes issue with Commerce's characterization of CEMEX's shortfall. STCC argues that Commerce did not accurately characterize the extent and seriousness of CEMEX's lack of cooperation. It argued that the �misrepresented� information went to the heart of the review. The information supplied by CEMEX went to fundamental issues of the definition of like product and sales outside the ordinary course of trade. In addition, STCC argues that the misstated Hidalgo information went beyond affecting merely a small percentage of CEMEX's total home market sales. STCC argues that this misstated Hidalgo information amounted to a considerable percentage of CEMEX's previously reported production of Type V cement. Significantly, this product is identical to the cement CEMEX sold in the U.S. STCC also contends that it is also very relevant to the DIFMER calculation. Id. at 8-9.

This Panel upholds Commerce's acceptance of CEMEX's timely submitted, and subsequently verified reported information, and its reliance upon partial facts available in calculating the dumping margin. We find that this approach is consistent with the dual purpose of use of adverse facts available, which is to encourage cooperation and to assist in calculating as accurate a dumping margin as possible. In these circumstances, we find that Commerce's actions achieve the goal of adverse facts available in a far more rational manner than dismissing all of CEMEX's information due to errors in a relatively small portion of the data and resorting to total facts available. Commerce's decision, in this regard, is in accordance with law and supported by substantial evidence on the record.

In reviewing Commerce's decision, we are guided by the teachings of the U.S. Supreme Court. In cases such as this, where Congress has not directly addressed the precise question at issue, �...the question for the court is whether the agency�s answer is based on a permissible construction of the statute.� Chevron v. U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). The U.S. Supreme Court has made it clear that the agency�s construction need not be the only permissible one, nor even the one which the court may have preferred. Id. The inquiry is one of whether Commerce's exercise of its discretion was reasonable.

The antidumping statute and the regulations grant Commerce considerable discretion in deciding whether to impose partial facts available and then to decide which partial facts available should be utilized. The statute provides that if certain criteria are met, Commerce must resort to facts available. See 19 U.S.C. � 1677e(a). In deciding which facts available to employ, the statute provides that Commerce: