OAS

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


IN THE MATTER OF:

Polystyrene and impact crystal from the United States of America and Germany

Secretariat File No.
MEX-94-1904-03


TABLE OF CONTENTS

I. INTRODUCTION

II. STATEMENT OF PROCEEDINGS

A. Proceedings of the Administrative Investigation

B. Panel Proceedings
 

1. Chronology of Proceedings

2. Motions and Orders
 

a. Motion to Amend Complaint (Muehlstein) November 2, 1995

b. Motion to Strike the Motion to Modify Complaint (Resistol, Industrias Nacional, and Investigating Authority) November 24, 27, 29, 1995.

c. Order regarding Sua Sponte Review February 1, 1996
 

i.Motion for Extension (Investigating Authority) February 2, 1996

ii. Motions to Revoke Order Regarding Sua Sponte Review (Resistol and Investigating Authority) February 6, 15,16, 1996
 

d. Motion to Terminate Review (Investigating Authority) March 8, 1996

e. Motion to Strike Muehlsteinís Submission (Investigating Authority) May 24, 1996

f. Motion to Strike in Muehlsteinís Submission (Investigating Authority), August 23, 1996

g. Motion for Reconsideration of the Order (Muehlstein) September 4, 1996

III. STANDARD OF REVIEW A. Article 1904 of the NAFTA

B. Article 238 of the Federal Tax Code

IV. REVIEW OF ANTIDUMPING ISSUES A. Introduction.

B. Summary Conclusion

C. The Final Determination

D. The Complaint.

E. Analysis
 

1. Representativeness Criteria

2. Discretionary Authority of the Investigating Authority

3. Discretionary Authority of the Investigating Authority to Apply the Representativeness Criteria

4. Determination that Muehlstein Questionnaire Response was Incomplete

5. Muehlsteinís Argument Regarding SECOFIís Obligation to Provide Notice that Its Response was Incomplete

6. Findings of Fact and Conclusions of Law

7. Calculation of Representativeness
 

F. Conclusion
V. ISSUES REGARDING COMPETENCY OF THE INVESTIGATING AUTHORITY A. Introduction

B. Applicability of the Last Paragraph of Article 238 of the Federal Tax Code
 

1. Amendment of Article 238 of the Federal Tax Code

2. Retroactive Application of the Last Paragraph of Article 238
 

C. Authority of the Panel to Undertake A Sua Sponte Review of the Competency of the Investigating Authority
 1. Rule 7 of the Rules of Procedure
 
D. Competency of the Investigating Authority
 1. Competency Criteria
 a. Competency Under the NAFTA

b. Competency Under Mexican Law

VI. Order

PANEL DECISION


I. INTRODUCTION.

In accordance with the provisions of Chapter XIX of the North American Free Trade Agreement (hereafter "NAFTA"), 1 this Panel was established to review the final determination issued by the Secretaría de Comercio y Fomento Industrial (hereafter "Investigating Authority" or "SECOFI") in the antidumping administrative investigation on imports of cristal and solid polystyrene from Germany and the United States of America. 2 Upon full consideration of the Complaint, the briefs and all other written submissions, oral arguments presented by the parties, and on the basis of the standard of review contained in Article 238 of the Federal Tax Code (hereafter the "CFF"), 3 the Panel affirms the Final Determination.

II. STATEMENT OF PROCEEDINGS

A. Proceedings of the Administrative Investigation

On January 4, 1993, Industrias Resistol, S.A. y Poliestireno y Derivados, S.A. de C.V. (hereafter "Resistol"), through their counsel, filed with SECOFI an antidumping complaint concerning imports of crystal and solid polystyrene from Germany and the United States of America. 4 On March 5, 1993, a Notice of Initiation 5 of the administrative antidumping investigation (hereafter "antidumping investigation"), was published in the DOF without the establishment of provisional antidumping duties. 6

On March 25, 1993, the Provisional Resolution was published in the DOF, in which provisional antidumping duties were established with respect to imports of crystal polystyrene from the United States of America. Provisional antidumping duties were not established with respect to imports of solid polystyrene from Germany, from either country, because of insufficient proof of injury to the domestic industry. 7 On January 17, 1994, Muehlstein International. Ltd. (hereafter "Muehlstein") entered an appearance in the second stage of the antidumping investigation and filed a response to the official questionnaire. 8 On November 11, 1994, a Final Determination was published in the DOF, which affirmed the Provisional Determination. 9 With respect to Muehlstein, SECOFI established an antidumping duty margin rate of 44.32% in connection with Muehlsteinís imports of crystal polystyrene, as a result of the application of best information available. SECOFI determined that Muehlsteinís response to the official questionnaire was incomplete, because Muehlsteinís domestic sales were not representative of its total sales, and because Muehlstein failed to provide other information as a basis for normal value. 10

B. Panel Proceedings

1. Chronology of Proceedings

On December 9, 1994, Muehlstein requested a binational Panel review of the Final Determination, 11 in pursuant to Article 1904 of the NAFTA, and the article 1904 Rules of Procedure (hereafter "Rules of Procedure"). 12 Notice of the request was published in the DOF, 13 and the Federal Register, 14 on December 19, 1994, and January 12, 1995, respectively. On January 9, 1995, Muehlstein filed its Complaint. 15 Generally, Muehlstein alleges that SECOFI: a) incorrectly applied legal provisions, b) acted contrary to the objectives of the Foreign Trade Law when it determined that domestic sales were required to be representative in order to provide a basis for normal value, c) incorrectly determined that the Complainant´s questionnaire response was incomplete, d) erred by not inform Muehlstein that the questionnaire response was incomplete; and, e) erred in it calculation that Muehlstein internal sales represented 1.5 % of total sales. 16 On January 23, 1995, the Investigating Authority, Resistol and Nacional de Resinas, S.A. de C.V. (hereafter "Resinas") 17 entered their appearance. On April 10, 1995, Muehlstein filed its Brief in Support of its Complaint (hereafter "Muehlsteinís Brief"). 18 On April 28, 1995, the review was suspended 19 due to the resignation of a panelist. 20 On October 23, 1995, the review resumed upon the appointment of a substitute panelist. 21

On November 2, 1995, Muehlstein filed a Motion to Amend its Complaint (hereafter "Motion to Amend"). This Motion resulted in series of motions filed by the other parties, and the issuance of various orders by the Panel. 22 On December 4, 1995, Resistol and the Investigating Authority filed their Response Briefs and presented arguments in opposition to Muehlsteinís Brief. 23 On December 19, 1995, Muehlstein filed a Reply Brief. 24 On January 11, 1996, oral arguments were presented in relation to Muehlstein´s Motion to Amend. 25 On January 26, 1996, the Motion to Amend was denied. 26 On February 1, 1996, the Panel issued an Order notifying the parties its decision to review a sua sponte the competency of the Investigating Authority. 27

On March 25, 1996, the Panel issued an Order concerning the Public Hearing, 28 which took place on April 18 and 19, 1996. 29

2. Motions and Orders

During the review, the parties filed a number of motions which are summarized below:

a. Motion to Amend Complaint, November 2, 1995 In its Motion to Amend Complaint, filed by Muehlstein 30 requested leave to amend the Complaint to include arguments regarding the competency of the Investigating Authority, and while included Steel Plate Decision. 31 The Panel denied the motion by way of an Order dated January 26, 1996, on grounds that it was untimely filed. 32

b. Motion to Strike the Motion to Amend the Complaint, November 24, 27, and 29, 1995 The Investigating Authority, Resistol and Resinas, alternative filed motions in which they requested that the Motion to Amend the Complaint be denied and leave to amend briefs to an amended Complaint. 33 By way of an Order issued on December 15, 1995, the Panel decided to extend a previously established ten day deadline, and to deny the Motions to Strike. Pursuant to the Order, Resistol and the Investigating Authority presented additional information. 34

c. Order to Undertake a Sua Sponte Review, February 1, 1996 The Panel notified the parties of its decision to undertake a Sua Sponte review of the competency of the Investigating Authority. In connection with that Order, the following motions were filed:

i. Motion for Extension (Investigating Authority), February 2, 1996. Motion filed by the Investigating Authority in which it requests a 10 day extension to present additional information, and a 5 day extension to respond to the submissions of the other parties. 35

ii. Motions to Revoke Order for Sua Sponte Review (Resistol and Investigating Authority) February 6, 15 and 16, 1996. Motions filed by Resistol and the Investigating Authority in which they request that the Panel revoke its Order of February 1, 1996, extend the applicable time periods, and to specify the issues regarding competency that are subject to the Sua Sponte review. 36 In its Orders of February 6 and 20, 1996, the Panel defined the issues subject to the review, and extended applicable time periodsfor the parties to present information. 37 With respect to the request that the Panel revoke its prior Order, Resistol, the Investigating Authority and Muehlstein presented additional information requested by the Panel. 38
 

d. Motion to Terminate Review (Investigating Authority) March 8, 1996 SECOFI presented a Motion requesting that the review be terminated on grounds that Muehlstein lacked legal interest. 39 The Panel denied the Motion on grounds that it was filed out of the time limits established in the Panel´s Order of March 27, 1996. 40

e. Motion to Strike Muehlsteinís Submission (Investigating Authority) May 24, 1996 Motion filed by SECOFI requesting that the panel strike Muehlstein´s written submission of April 26, 1996 , which contained information Muehsltein claimed was requested during the Public Hearing. 41 By way of its Order of June 12, 1996, the Panel decided to strike all unsolicited written submissions presented after the Public Hearing.

f. Motion to Strike Information contained in Muehlsteinís Submission (Investigating Authority), August 23, 1996 By way of its Order of August 30, 1996, the Panel decided to strike the material presented by the Complainant on July 8, 16, 1996, for not complying with Rule 68(1).

g. Motion for Reconsideration of the Order (Muehlstein) September 4, 1996 Motion filed by Muehlstein requesting reconsideration of the Panel´s Order of August 30, 1996. By Order of September 11, 1996, the motion was denied.

III. STANDARD OF REVIEW

A. Article 1904 of the NAFTA

The purpose of this Binational Panel Review is to review pursuant to the antidumping laws of the Mexico the Final Determination issued in connection with the antidumping duty investigation on imports of crystal and solid polystyrene from Germany and the United States of America (Article 1904(2) of the NAFTA). 42 The antidumping laws of Mexico consist of those laws, 43 legislative histories, Regulations, administrative practice, and relevant judicial precedents, which the Federal Tax Court (TFF) 44 would otherwise apply in an antidumping judicial review. 45 The standard of review that must be applied in the binational panel review is established under article 1904 (3), and Annex 1911 of NAFTA. Article 1904 (3) provides that a binational panel must apply the standard of review pursuant to Annex 1911, as well as general principles of law that a domestic tribunal would otherwise apply when reviewing a final antidumping determination of the investigating authority. 46 General principles of law includes principles of standing of legal interest, due process of law, rules on construction, issues without legal validity, and exhaustion of remedies. 47 Annex 1911 provides that the standard of review applicable in the review the Criteria provided in Article 238 of the CFF, as amended.

B. Article 238 of the Federal Tax Code Pursuant to Annex 1911 of Chapter XIX of the NAFTA, in the case of Mexico, the standard of review is expressed in Article 238 of the CFF, as amended.

Article 238 provides that a Final Determination will be declared illegal upon one of the following elements:

    I. Incompetence of the official that dictated or conducted the proceeding;

    II. Omission of a formal legal requirement, which affects the defenses of the particular, and which affects the substance of the challengy determination, including the absence of findings of fact and conclusions of law;

    III. Defects in the proceeding that affected the defenses of the particular, and which affected the substance of the challenged resolution;

    IV. If the facts upon which the determination is based did not occur or they were different or were appraised in wrong form, or if was issued in infringement of the applicable provisions or omit to apply the appropriate ones.

    V. The administrative determination is based on an exercise of discretionary authority that do not correspond to the proposes of the law which confered such discretionary authority.

After this review was initiated, during 1995, the CFF was amended by the Mexican Congress. 48 Specifically the Article 238 of the CFF was amended to include an additional paragraph. This paragraph establishes that:

On the basis of public interest, the Court may sua sponte, on the basis of public interest, declare an authority incompetent to issue the challenged resolution, and the total absence of findings of fact and conclusions of law. In accordance with NAFTA Article 1904(3) and Annex 1911, this panel must apply the review criteria of the standard of review expressed in Article 238 of the CFF, as amended. Therefore, the paragraph added to Article 238 forms part of standard of review applicable in this case. 49

IV. REVIEW OF ANTIDUMPING ISSUES

A. Introduction

Muehlstein challenges SECOFIís final determination which established company specific antidumping duty margins for Muehlstein of 44.32% ad valorem for imports of crystal polystyrene, and 29.98% ad valorem for imports of solid polystyrene. 50 Generally, Muehlstein alleges in its complaint that the final determination was contrary to law on the following grounds: SECOFI applied a "representativeness" test not provided for by law; SECOFI erred in its determination that Muehlsteinís questionnaire response was incomplete; SECOFI failed to notify Muehlstein that its questionnaire response was incomplete, and failed to provide it with an opportunity to submit additional information; the findings of fact and conclusions of law set forth in the final determination are legally insufficient; the "representativeness" test calculations were incorrect.

B. Summary Conclusion

Upon review of the Complaint, the briefs and other written memoranda filed by the parties, the oral arguments presented by the parties, the law applicable to this case, and on the basis of the standard of review criteria expressed in Article 238 of the CFF, the Panel affirms the final determination with respect to the allegations contained in Muehlsteinís complaint.

C. The Final Determination

The underlying antidumping duty investigation was initiated on March 5, 1993, 51 and notice of the initiation ("Initial Resolution") was served on the governments of the United States and Germany. 52 Subsequent to the publication of the Initial Resolution, a number of interested parties entered appearances in the investigation and submitted questionnaire responses and other information to SECOFI. On November 25, 1993, SECOFI published in the Diario Oficial a Provisional Resolution. 53

Muehlstein entered an appearance in the investigation on January 17, 1994, and submitted a questionnaire response which included sales and price data for transactions in the United States and Mexico. 54 It did not provide third-country sales data or cost of production information. Apart from its initial submission, Muehlstein made no further written submissions during the investigation. For purposes of the final determination, SECOFI rejected Muehlsteinís questionnaire response on grounds that it was incomplete. 55 Specifically, SECOFI determined, on the basis of a "representativeness test" (hereafter "representative test") that Muehlsteinís U.S. home market sales did not permit a valid comparison to sales in Mexico and could not be used as the basis for normal value. SECOFI determined that since the U.S. sales were not comparable, Muehlstein should have submitted third-country sales data, or cost or production information, pursuant to applicable regulations. 56 Under SECOFIís criterion for representative, there being no data in the questionnaire response on which to base normal value, SECOFI rejected the questionnaire response as incomplete:

As mentioned in subsection 28 of this determination, this company did not answer completly the official questionnaire. Particularly, the company did not provide normal value options to domestic sale prices, specifically, third countries sales data or cost of production information. Pursuant to Article 2, subsection II of the Regulations against Unfair International Trade Practices, the Secretariat rejected the domestic sales data because the sales of this company in the United States are not representative of its total sales, due to the fact that those sales represent 1.5 per cent of its total sales volume and, therefore, those do not permit a valid comparison with the Mexico exportation prices. 57 Having rejected Muehlsteinís questionnaire response, SECOFI established company specific antidumping duty margins for Muehlstein of 44.32 percent for solid polystyrene, and 29.98 percent for crystal polystyrene, on the basis of best information available consisting of the highest antidumping duty margin received by an investigated company. 58

D. The Complaint

Muehlstein alleges in five counts that the final determination was erroneous and contrary to law, and requests that this Panel remand to SECOFI with instructions to correct the determination. First, Muehlstein alleges that SECOFI erred when it applied a "representative" test to determine whether its U.S. home market sales were an appropriate basis for normal value. Muehlstein argues that the rejection of its U.S. sales data was erroneous because Mexican law does not expressly require that home market sales be "representative" in order to form the basis for normal value. 59 Muehlstein reasons that because SECOFI applied a legal requirement that does not exist, the final determination is contrary to law under section II of Article 238 of the CFF. 60 Second, Muehlstein alleges that, in accordance with sections II and IV of Article 238 of the CFF, the Panel should find that the final determination is contrary to law on the basis that SECOFI failed to set forth findings of fact and conclusions of law that adequately support the final determination. 61 Muehlstein argues that assuming SECOFI correctly applied the representative test, it failed to provide in the final determination a definition for "representative" which corresponds with the objectives and intent of the antidumping law, and to set forth the basis on which it determined that Muehlsteinís U.S. home market sales were not representative. Third, Muehlstein alleges that SECOFI erred in its determination that Muehlsteinís questionnaire was "incomplete" because it did not contain third-country sales data, or cost of production information. 62 In support, Muehlstein notes that the questionnaire response does not require that cost of production information be submitted. 63 Muehlstein argues that the questionnaire did not define the term "representative," and that it was obligated to interpret and define the meaning of the term. On the basis of its interpretation, Muehlstein determined that its U.S. home market sales were "representative," and that it was not required to submit third-country sales or cost of production data: that its questionnaire response was complete. Muehlstein argues that SECOFIís determination that the questionnaire response was incomplete is contrary to law pursuant to the section II of Article 238 of the CFF. 64 Fourth, Muehlstein alleges that SECOFI erred by not notifying Muehlstein that its questionnaire response was incomplete, and by not giving it the opportunity to submit additional information. 65 Muehlstein claims that SECOFI informed Muehlsteinís legal counsel during an informal meeting that additional information was not required, 66 and that during the ten month period between the submission of its questionnaire response and the publication of the final determination, SECOFI sought and received information from other parties. Muehlstein claims that had it been afforded a similar opportunity, it would have provided additional information. On the basis of SECOFIís failure to inform it that the response was incomplete, Muehlstein claims that the final determination is contrary to law under section III of Article 238 of the CFF. 67 Fifth, Muehlstein alleges that SECOFI erred in its determination that Muehlsteinís U.S. home market sales constituted 1.5 percent of its total sales. 68 Muehlstein notes that its own calculation indicates that its U.S. home market sales accounted for 3.72 percent of total sales. Muehlstein claims that this error is significant to the extent the Panel rules that the "representative" standard is between 1.5 and 3.72 percent. 69 Muehlstein argues that, in any event, the Panel should find under section IV of Article 238 of the CFF that the final determination is contrary to law on the basis of the SECOFIís calculation error. 70

E. Analysis

In accordance with the standard of review expressed in Article 238 of the CFF, the Panel examines whether SECOFIís use of the representative test was contrary to law; whether SECOFIís determination that Muehlsteinís questionnaire response was incomplete was contrary to law, whether SECOFI erred by not notifying Muehlstein that its response was incomplete, whether the final determination is supported by sufficient findings of fact and conclusions of law, and whether SECOFI erred in its calculation under the representative test.

1. Representativeness Criteria

The core of Muehlsteinís complaint is that the representative test does not legally exist because it is not expressly provided, i.e. written out, in a law or regulation. A fundamental principle of law is that a government authority may not take action that is not founded in law. 71 Here, neither the law nor regulations expressly require that SECOFI apply a representative test to determine whether an exporterís home market sales are comparable with export price. That a criterion or standard is not written out in a law, however, does not negate its legal existence. An administrative authority may be authorized by law to exercise discretionary authority to adopt criteria and standards that it deems relevant and necessary to discharge its legal mandate. Administrative authorities routinely apply criteria and standards that are not set forth within the black letter of a law or regulation. Indeed, in matters which are highly complex and technical and require specialized expertise and knowledge, such as an antidumping duty investigation, it is common for an administering authorities to be granted discretionary authority with respect to the criteria and standards it will rely on to carry out its responsibilities. In this case, the Panel must determine whether SECOFI had discretionary authority to adopt and apply the representative test. 72 If the Panel decides that SECOFI had such discretionary authority, the Panel must then decide whether the application of the representative test was otherwise contrary to law. The legal basis for the representative test is found in Article 2 of the Regulations: 73 For the purposes of determining the dumping margin, the Secretariat will compare the normal value of the foreign product with the price of the product upon import to the Mexican market.

The Secretary will consider the normal value of a product:

    I. The comparable price, in the course of the normal trade relations, of an identical or similar product destined for consumation in the country of origin;

    II. When sales of identical or similar products made in course of normal commercial operations in the domestic market, do not permit a valid comparison, the following shall be considered as normal value:

    A. The higher comparable price for the identical or similar export products sold to third-countries in the course of the normal commercial operations, provided that the price of such sales are repesentative; or B. On the basis of cost of production in the country of origin...

Under the regulation, an exporterís sales in its home market must be used as the basis for normal value provided that two conditions are met. First, the sales under consideration must have been made in the course of normal commercial operations and consist of sales of merchandise that is identical or similar to the merchandise that is the subject of the investigation. 74 Second, the sales must permit a "valid comparison." If one of these conditions is not met, the home market sales are deemed not to constitute an appropriate basis for normal value, and normal value must be based either on third-country sales, or costs of production. To determine whether Muehlsteinís reported U.S. home market sales permitted a "valid comparison," SECOFI employed a representative test under which it calculated the percentage of Muehlsteinís world wide sales (total sales) accounted for by Muehlsteinís reported U.S. sales. 75 SECOFI reportedly utilizes the representative test to ensure that the prices compared with export price reflect general prevailing price conditions in the exporterís home market. 76 In addition, the representative test is used to ensure that the volume of transactions in the home market is sufficiently large to minimize the risk of using prices that are influenced by factors that do not reflect normal commercial conditions of sale. 77 The representative test is also used to determine the viability of third-country sales as the basis for normal value. 78 In such instances, the test is used to determine whether the sales in the third-country with the highest price permit a valid comparison with the export price to Mexico. 79 Should an exporter not have sales in third-countries, or if its third-country sales do not permit a valid comparison with export price in Mexico, normal value must be based on costs of production. 80

2. Discretionary Authority of the Investigating Authority

This Panel finds that SECOFI has discretionary authority for purposes of conducting antidumping duty investigations. The Constitution provides that the executive branch of the government is responsible for implementing and executing the laws passed by the legislature. 81 The Constitution also provides that the legislature may authorize the executive branch to undertake any matter related to regulation of international trade. 82 The Implementing Law of Article 131 of the Mexican Constitution for Foreign Trade Matters expressly authorizes the executive branch authority to establish the procedures for the regulation or restriction of exports and imports through the establishment of provisional and definitive compensating [antidumping and countervailing] duties in connection with unfair trade practices. 83 The law specifically delegates to SECOFI authority to conduct matters related to unfair trade practices. 84

The Federal Public Administration Organic Law provides that SECOFI is authorized to administer and conduct the following matters: formulate and implement general international trade policy; review and establish import and export restrictions; study and formulate general rules respecting international trade and special import duties. 85 The regulations also affirm the statutory delegation of authority to SECOFI to conduct antidumping duty investigations. 86 The foregoing constitutional, statutory, and regulatory provisions establish that SECOFI is legally empowered to conduct antidumping proceedings. As such, this Panel finds that SECOFI is authorized to exercise discretion in the establishment and development of rules, standards, and criteria, necessary to conduct antidumping proceedings. Under section II of Article 238 of the CFF, a final determination is contrary to law if it is not based on formal requirements established by law. The Panel finds that the representative international trade. For administrative purposes, the executive branch, through SECOFI, is responsible for the interpretation and application of the provisions contained in the Foreign Trade Law. Foreign Trade Law, Articles 1 and 2. test is based on discretionary authority delegated to SECOFI under formal requirements established by law. As such, the Panel affirms the final determination with respect to SECOFIís adoption of the representative test to determine whether an exporterís home market sales are comparable to export price. The Panel next considers whether SECOFI exceeded its discretionary authority, or otherwise acted contrary to law, in the application of the representative test in this case.

3. Discretionary Authority of the Investigating Authority to Apply the Representativeness Criteria.

An administrative authority authorized to exercise discretion is free to establish and develop criteria and standards which are reasonably aimed to accomplish the legal objectives delegated to it by law or regulation. 87 To be lawful, therefore, an exercise of a discretionary act by an administrative authority must have a basis in law or regulation. An administrative authority may not exceed the scope of its discretionary authority, 88 or engage in acts that have no rational basis in law or regulation. 89 Under section V of Article 238 of the CFF, an antidumping duty final determination is contrary to law to the extent that it is based on a discretionary act that is inconsistent with the objectives and purposes of the antidumping law. The representative test is based on an regulatory provision which requires SECOFI to determine whether sales used as the basis for normal value permit a valid comparison with Diccionario Jurídico, Instituto de Investigaciones Jurídicas, UNAM, México DF, 1985, editorial UNAM Porrúa. export price. As the regulation does not expressly provide a definition or standard for determining whether prices are comparable, SECOFI properly established such criteria. In addition to being based on a regulation, the purpose of the representative test is consistent with the purposes and objectives of the antidumping law. The representative test is designed to ensure that prices used to compare with export price accurately reflect general pricing conditions in the foreign market. This purpose is consistent with the objectives of the antidumping law which is to establish the imposition of antidumping duties which accurately reflect the extent of dumping in Mexico. 90 The Panel, therefore, finds that SECOFI neither abused, nor exceeded, its discretionary authority by the application of the representative test in this case. 91 Hence, in accordance with section V of Article 238 of the CFF, the Panel affirms the final determination with respect to the use and application of the representative test. The Panel next reviews whether SECOFIís determination that Muehlsteinís questionnaire response was incomplete was contrary to law.

4. Determination that Muehlsteinís Questionnaire Response was Incomplete

Muehlstein alleges that SECOFI erred when it determined that its questionnaire response was incomplete. As grounds, Muehlstein asserts, without reference to law or regulation, that SECOFI should have defined the word "representative" in its questionnaire. 92 Muehlstein contends that had a definition been provided, that additional data would have been submitted.

Under section II of Article 238 of the CFF, this Panel is required to find that the final determination is contrary to law if it determines that SECOFI omitted to apply applicable formal requirements established by law, that the omission affected Muehlsteinís defenses, and that the omission formed a basis for the determination. The Panel determines that SECOFI followed applicable legal requirements in making its determination that Muehlsteinís response was incomplete. SECOFI was required under the regulation to determine whether Muehlsteinís reported U.S. sales data permitted a valid comparison with export price. Having determined under its discretionary authority that a valid comparison could not be made, SECOFI was required by the regulations to base normal value on third-country sales or cost of production information. Since Muehlstein did not submit third-country sales or cost of production data, SECOFIís conclusion that the questionnaire was incomplete was in accordance with the regulations. Muehlsteinís argument that it reasonably relied on its own definition for the term "representative" is not convincing. Words and phrases used in antidumping statutes and regulations have special and distinct meanings. A party in an antidumping investigation is obligated to submit data in a timely fashion, and in the form by the regulations and the questionnaire. This means, among other things, that a party has a base level of responsibility with respect to the content, accuracy, and completeness of the information it submits, which includes the responsibility to seek clarification of unfamiliar terms and words. 93 Muehlstein should have been alerted that the word "representative," as used in the regulation and the questionnaire, bore special technical significance. The regulation expressly provides that if an exporterís home market sales are not "comparable," normal value must be based upon third-country prices, or cost of production information. 94 The questionnaire clearly states that in the event that home market sales "are not representative," third-country sales data must be provided. 95

Despite that the special significance of the word "representative" virtually leaps from the texts of the regulation and questionnaire, Muehlstein used an American dictionary to define the word and, on the basis of that definition, concluded that it was not required to report third-country sales data. 96

Muehlsteinís decision to consult an American dictionary to interpret a Spanish word that was contained in a Mexican regulation, and in a questionnaire issued by a Mexican administrative authority in the course of a Mexican administrative proceeding, was not reasonable. Moreover, the definition that Muehlstein came to rely onó"one that serves as an example for others of the same classification"óbears no rational application in the context of an antidumping investigation. 97 Muehlstein does not explain how, on the basis of the definition it discovered in the American dictionary, it determined that it was not required to submit third-country sales data or cost of production information.

Muehlstein contends that exporters are not required by law to guess correctly the unique definitions which SECOFI applies to "common, every-day terms" such as representative. 98 The argument that the word "representative" as used in the context of the antidumping duty investigation is a common every-day term is absurd and post-hoc rationalization. Although the law does not require Muehlstein to guess how SECOFI defines the term "representative," it is precisely for that reason that Muehlstein should have asked SECOFI to clarify the meaning of the word: if a party is unsure as to the meaning of a term or word that is obviously technical in nature, at minimum, it must ask SECOFI for a clarification. 99

In addition, as a party to an antidumping duty proceeding, Muehlstein should have been alerted by other factors that the word "representative" was a technical term and deserved careful consideration. First, the underlying investigation was not the first time that the representative test was used. In two prior cases, SECOFI articulated its use of the representative test to determine whether an exporterís home market sales were comparable with export price in Mexico. 100 Second, new regulations were issued in December of 1993, approximately fifteen days before Muehlstein submitted its questionnaire response. 101 The new regulations specifically provide that a representative test will be used to determine whether an exporterís home market sales permit a valid comparison with export price. 102 The new regulations did not retroactively apply to the underlying investigation, but the new regulations were a clear warning to Muehlstein that its interpretation of the word "representative" was incorrect.

Accordingly, the Panel finds that SECOFIís determination that Muehlsteinís response was incomplete was based on a formal requirement established by law and the determination that Muehlsteinís response was incomplete is affirmed. The Panel next considers whether SECOFI erred by not notifying Muehlstein that its reported U.S. sales were not representative and would not be used as the basis for normal value.

5. Muelhlsteinís Argument Regarding Secofiís Obligation to Notify that Its Response was Incomplete

On the basis of Article 27 of the regulations and section III of Article 238 of the CFF, Muehlstein urges the Panel to find that SECOFI erred by not notifying Muehlstein that the questionnaire response was incomplete, and by not giving it an opportunity to submit additional information.

In order to declare that a final determination is contrary to law under section III of Article 238 of the CFF, this Panel is required to find that an actual procedural requirement was violated. 103 Muehlstein claims that SECOFI violated Article 27 of the regulations because SECOFIís failure to notify it that its response was incomplete prevented it from submitting additional data. The Panel finds that Article 27 of the regulations does not apply in this case. Article 27 provides that a party may submit information at any time during the course of an antidumping proceeding. There is no evidence in the administrative record that SECOFI refused to accept information from Muehlstein, or that Muehlstein submitted additional information. Indeed, it is uncontroverted that there is no legal requirement that SECOFI notify interested parties in the final stage of an antidumping investigation that the information they have submitted is incomplete or deficient. 104

Whether or not SECOFI would have refused to accept additional information from Muehlstein is speculative and does not provide a basis for a legal claim under section III of Art. 238 of the CFF. The Panel may not base its decision on speculation, or on procedural requirements that do not exist. Given that Article 27 of the regulations does not apply in this case, and given that Muehlstein fails to cite to any other actual procedural requirement that it believes was violated, the Panel determines that Muehlstein has failed to state a claim on which relief can be granted under section III of Article 238 of the CFF. 105

Notwithstanding the failure to state a claim, the Panel considers whether SECOFI was otherwise obligated to inform Muehlstein that its response was incomplete and to solicit additional information from Muehlstein. Muehlstein asserts that SECOFI informed it during an informal meeting that further information was not required. Muehlstein cites to a letter wherein Muehlsteinís Mexican counsel purportedly informs a U.S. attorney about the meeting. This offer of proof is without merit. There is no evidence in the administrative record that the meeting took place, or as to what transpired during the meeting. 106

In addition, the letter is not part of administrative record and is not subject to consideration by this Panel. 107 In any event, the letter is not probative, as it does not establish that SECOFI had already reviewed Muehlsteinís response, or determined that the U.S. sales were not representative. Muehlstein further asserts that SECOFI treated it unequally by requesting and accepting additional information from other interested parties. Muehlstein offers no proof that SECOFI would not have accepted additional information from Muehlstein had it been submitted, or that SECOFI intended to discriminate against it. With respect to Muehlsteinís argument that SECOFI had sufficient time to review its response and accept additional data because the final stage of the proceeding extended over a period of eleven months, there is no evidence in the administrative record that SECOFI or any of the interested parties knew at the beginning of the final stage of the investigation that eleven months would lapse before publication of the final determination. From the date of publication of the preliminary determination, SECOFI has 30 working days to review its preliminary determination, 108 and four months to publish the final determination. 109

It is not uncommon for the final determinations to be published beyond the four months, 110 a fact that is indicative of the tremendous pressure on SECOFIís resources during the period between the preliminary and final determinations. With the exception of Muehlstein, all of the interested parties participated in the preliminary stage of the investigation. 111 The preliminary stage affords interested parties a number of procedural safeguards to ensure that the information they have submitted is complete and accurate. 112

As noted above, the final stage is conducted under more restrictive time restraints, and is dedicated primarily to correcting the preliminary determination. Muehlstein entered its appearance in the final stage of the investigation. 113 Parties that voluntarily enter the final stage of an investigation seek to establish for the first time a company specific dumping margin. They do not have the benefit of the various safeguards to correct data that are afforded to parties during the preliminary stage. It behooves them, therefore, to ensure that the information they submit is complete and accurate. Antidumping duty investigations are by their nature complex and technical. In order to achieve dumping duties that accurately reflect general pricing conditions, SECOFI should ensure that its calculations are based on accurate and complete data. To this end, SECOFI should, whenever possible, notify parties as to deficiencies in the data they have presented. 114 Indeed, the law recognizes that dumping margins should be based on accurate information and it provides various safeguards to ensure that the information submitted is accurate and complete, and that the parties have an opportunity to cure deficiencies in the information they have submitted. 115

Notwithstanding those safeguards, there is no requirement that SECOFI ensure that each party has exercised each of its available options, or that each party is satisfied that the information it has provided is complete. Such a requirement would place an undue, if not impossible, administrative burden on SECOFI, in particular during the final stage of an investigation. Parties to antidumping duty proceedings bear a responsibility to submit whatever information they deem necessary to protect their interests, and to ensure that the information they submit is accurate. While SECOFI should facilitate the submission of information, and duly consider all information submitted in proper form and within the appropriate time periods, it is not SECOFIís responsibility to decide for a party what information it should submit: the law does not require SECOFI to hold the hand of each interested party throughout each stage of an antidumping proceeding.

In accordance with the criteria expressed in section III of Article 238, the Panel finds that SECOFI did not violate a procedural requirement established by law by not informing Muehlstein that its reported U.S. sales were not representative.

6. Findings of Fact And Conclusions of Law

Muehlstein alleges that the final determination is contrary to law on the grounds that the findings of fact and conclusions of law set forth in the determination are legally insufficient. 116

As grounds, Muehlstein asserts that the findings of fact and conclusions of law are deficient because they do not define the term "representative," and they fail to set forth how the representative test was used to determine that Muehlsteinís U.S. home market sales were not comparable. 117

In accordance with section II of Article 238 of the CFF, this Panel must find that the final determination is contrary to law on the following basis: Omission of a formal requirement established by law which affects the defenses of the concerned party and which formed part of basis on which the challenged determination was founded including the absence of findings of fact and conclusions of law. 118

Article 16 of the Mexican Constitution provides the fundamental basis for the requirement that a final determination must set forth sufficient findings of fact and conclusions of law. Article 16 of the Constitution provides that no one shall be disturbed in his person, family, domicile, documents, or possessions except by virtue of a written order by competent authority which states the legal grounds and justification for the action taken. 119

The purpose of the requirement is to allow a person whose interests have been affected by an administrative act to understand the factual and legal basis for the action taken against him. Without such an understanding, an affected person would be left without a basis by which to redress the action or seek a legal remedy. Hence, to be sufficient, findings of fact and conclusions of law should cite the legal basis under which the authority is authorized to act; the law or regulation upon which the act is based; special facts or circumstances which were taken into consideration; and the legal rational or reasoning which led to the conclusion that the act should be taken. 120 In the context of an antidumping proceeding, the final determination should set forth findings of fact and conclusions of law that inform interested parties of the underlying factual and legal basis on which the final determination is based so that the parties, among other things, may effectively challenge the final determination. The Panel finds that the findings of fact and conclusions of law set forth in the final determination are legally sufficient. First, it is evident to the Panel that the final determination does contain findings of fact and conclusions of law. As a result, the Panel does not find that the final determination is contrary to law on the basis that there is an "absence" of findings of fact and conclusions of law. In addition, the Panel finds that the final determination cites the legal authority upon which it is based; the legal authority which authorizes SECOFI to act in antidumping proceedings; 121 the law and regulation upon which SECOFI based its determination; 122 special circumstances, 123 and the factual and legal reasoning underlying SECOFIís final determination. 124

The findings of fact and conclusions of law are sufficient to provide notice of the legal and factual basis for the action undertaken by SECOFI, including for purposes of challenging the final determination. As such, the Panel affirms the final determination on the basis that the findings of fact and conclusions of law set forth therein are legally sufficient. Muehlsteinís assertion that the final determination should have definited the term "representative," and that it should have described the process used in applying the representative test, is without merit. Muehlstein fails to cite to a law or regulation which requires that an antidumping final determination to achieve that high level of detail. Indeed, any requirement that SECOFI define in the final determination all of its technical terms, e.g. volume of imports, dumping margins, selling expenses, export price, normal value, packing, domestic market, selling price, would place an undue administrative burden on SECOFI and not serve any practical or reasonable purpose. In any event, the Panel finds that the final determination contains an explanation of the representative test sufficient to describe its characteristics, purpose, and use. More is not required in this case.

7. Calculation of Representativeness

Muehlstein alleges that SECOFI erred when it calculated that Muehlsteinís U.S. home market sales constituted 1.5 percent of total sales. 125  In support, Muehlstein notes that its own calculation shows that the U.S. home market sales accounted for 3.72 percent of its total sales. 126 Muehlstein asserts that the error is significant to the extent that the Panel determines that the standard for "representative" is above 1.5 percent and below 3.72 percent. 127 Muehlsteinís claim is not relevant given that the Panel does not determine that the standard for representativeness is between 1.5 and 3.27 percent, and, the Panel does not reach a decision as to the percentage criteria under the representative test. Muehlsteinís complaint does not challenge the legality of the cut-off percentage criteria used by SECOFI to determine representativeness: the complaint does not challenge the final determination on the basis that its U.S. sales, whether 1.5 or 3.72 or some other percentage, should have been deemed "representative." As such, the Panel does not review whether the final determination is contrary to law on the basis of an alleged calculation error by SECOFI.

F. Conclusion

On the basis of the foregoing, the Panel affirms the final determination with respect to the allegations set forth in Muehlsteinís complaint.

V. ISSUES REGARDING THE COMPETENCY OF THE INVESTIGATING AUTHORITY

A. Introduction

On February 1, 1996, the Panel notified the parties that pursuant to the last paragraph of Article 238 of the CFF, the panel decided to consider issues concerning the competency of the investigating authority. The decision of the Panel to conduct the sua sponte review was based on several factors. Muehlstein filed its brief-in-chief on April 10, 1995. 128 Eighteen days later the Panel review was suspended due to the resignation of a panelist. 129

On August 30, 1995, during the period of suspension, the first NAFTA Article 1904 binational panel decision (hereafter "Steel Plate Decision") concerning a Mexican antidumping duty final determination was issued. 130 The Steel Plate Decision generated considerable public attention because it was the first NAFTA panel review of a Mexican antidumping duty determination, and because the Panel in this case determined that the investigating authority lacked competency during certain phases of the underlying antidumping duty investigation. 131

Out of general interest various panelists were aware of the competency issues addresed in the Steel Plate Decision. On November 2, 1995, Muehlstein moved to amend its complaint to include allegations that the investigating authority lacked competency during certain phases of the underlying investigation. 132 Muehlstein argued in its motion that the same factual circumstances underlying the Steel Plate Decision existed in the present case and attached a copy of the Steel Panel Decision to its motion. 133 On December 4, 1995, Resistol, submitted a response brief wherein it argued that SECOFI was competent during all phases of the underlying investigation. 134 Noting that Muehlstein did not address competency issues in its brief, Resistol stated that it was necessary to express an opinion on competency in order to provide an exhaustive review of the standard of review criteria. 135 Resistol concluded that there was no basis or reason by which it could be determined that the investigating authority in this case was not competent. 136 After receiving briefs and hearing oral arguments, the motion to amend was denied on the basis that the motion was filed out of time. 137

Notwithstanding the dismissal of the motion, the Panel remained deeply concerned of the possibility that the final determination before it was contrary to law by virtue of lack of competency of the investigating authority. As noted in the preceding section, Article 238 of the CFF, which constitutes the standard of review applicable in this case, was amended in the latter part of 1995, and an additional paragraph was added to Article 238 which provided sua sponte authority to declare a final determination contrary to law by reason of lack of competency of the administrative authority. 138 The amendment raised a number of novel issues concerning sua sponte authority in the context of NAFTA Article 1904 binational panel reviews. Those issues were particularly significant in this case due to the competency issues raised by Muehlstein and Resistol. NAFTA binational panels replace judicial review of final antidumping duty determinations. 139

As a result, the Panel recognized that if it did not review the competency issues to the extent permissible under the last paragraph of Article 238 of the CFF, there was a risk that it would affirm a potentially illegal final determination, a circumstance which would be contrary to public interest; result in prejudice to Muehlstein; and affect the credibility and integrity of the NAFTA binational panel process.

The Panel also considered that it was undertaking a review of competency issues, as opposed, for example, to new issues involving an antidumping technicality such as the application of best information available. Competency constitutes the legal foundation upon which action taken by government authorities may or may not be valid. Hence, whether an antidumping duty final determination is the result of action taken by a competent investigating authority is an issue that is subsumed in all panel reviews. This is evident in NAFTA Article 1904 which provides that the purpose of a panel review is to determine whether, on the basis of an administrative record, a final antidumping and countervailing duty determination of a competent investigating authority of an importing Party was in accordance with the antidumping and countervailing duty laws of the importing Party. 140 The definition for "competent investigating authority" provided for in NAFTA Chapter XIX 141 manifests the legal formality that competency, as a legal principle fundamental to all action taken by government authorities, has in practically all aspects of Mexican law. 142

Accordingly, in addition to the factors mentioned above, the Panel based its decision to undertake a sua sponte review of competency issues on the following considerations: a. questions concerning the competency of an investigating authority are transcendent in the law, and are matters of public interest, b. the competency of all administrative authority is a basic legal presumption so that the precepts they declare, order, or process, may be valid, c. the competency of the investigating authority is fundamental to the dispute resolution process established under Chapter 19 of the North American Free Trade Agreement, d. the competency issues could be determinative in this case. 143 Aware that it was confronted with issues addressed for the first time by a panel, 144 the Panel decided that in addition to examining issues related to the competency of the investigating authority, that it would also review the extent of its own authority to conduct a sua sponte review in this case. As part of the review, the Panel requested the parties to submit briefs, 145 and to present oral arguments, 146 regarding the competency of the investigating authority, and the competency of the Panel to conduct a sua sponte review.

B. Aplicability of the Last Paragraph of Article 238 of the Federal Tax Code.

1. Amendment of Article 238 of the Federal Tax Code

The Article 238 of the Federal Tax Code was amended by a the decree published in the DOF on December 15, 1995, to add a last paragraph which: The Tribunal would be entitled to enforce by its own iniciative, for been of public order, the legal incompetence of the authority to declare the challenge resolution and the no accordance to law. Persuant to the NAFTA provisions cited above in the decision, 147 which establish the Article 238, the admendment to Article 238 forms part of the standard of review.

2. Retroactive Application of the Last Paragraph of Article 238 of the Federal Tax Code

The amendment to Article 238 of the CFF provides in section VIII, of the fifth transitory article that administrative trials commenced prior January 1 st , 1996 are to be instruct in accordance with CFF provisions that were in effect prior to that date. The transitory provision does not limit this Panelís ability to appliy the last parragraph of article 238, as the transitory article refers to the judge instruction of administrative dispute trials presented before the Federal Fiscal Tribunal (TFF). The instruction stage of a panel review is governed by Rules of Procedure, and not by the instruction provisions of CFF. That binational panels replace the TFF in reviews of final antidumping duty determinations does not mean that the reviews before panels follow the same provisions of the TFF. The Rules of Procedure that apply to binational panels are those agreed and established by the NAFTA Parties, and which constitute the rules of procedure applicable to tis review pursuant to Article 1904 and Annex 1911 of the NAFTA. Pursuant to the NAFTA, Article 238 of CFF constitutes the standard of review applicable to binational panel review, and does not constitute the instruction stage. Article 238 of the CFF, does not contain instruction provision. The criteria set forth in this Article to declare the illegality of an administrative determination, are not instruction criteria.

By amendement of the CFF, the legislator did not intend that the limitations expressed in the fifth transitory article, were applicable to the instruction stage of binational panel reviews; to state the opposite would be an extrem interpretation of the CFF provisions. For these reasons, the arguments by SECOFI by the domestic products regarding the retroactive application of the amended of Article 238 of the CFF 148 , are not supported by resort to paragraph VIII of the fifth transitory article, as only the procedural guidelines for trials before the TFF are subject to that transitory article. Pursuant to the constitutional right regarding the non-retroactive application of laws, the Supreme Court of Justice has held 149 that the retrocative effect of a regulation exists when the law changes, modifies or extinguishes personal rights adquired under the law that was in effect prior to the amendment.

In this case, the vested rights of the Invesitgating Authority, or of the domestic producers which are affected by the application of the aditional paragraph of article 238. Must be identified at best, the parties had a right prior to the amendment that consisted a lack of power by the TFF to undertake a sua sponte review of the competency of an authority; that is, that means that no benefits were adquired by the prior benefit consiste of a lack of power of the TFF.

To affirm that the Investigating Authority had a vested right to act without competency, or that the domestic producers had a vested right for the Investigating Authority Act without competency, would be contrary to public interests, certainly, no one can posses a right for the competency of the Authority to be non reviewable. In conclusion it cannot be alledged that a vested right was affected as no right existed. Why the law prior to and after, the amendment. To ? an authority cannot act without competence, is contrary to public interest. Certainly, one cannot have a right that the competency of the Investigating Authority not be reviewable, without establishing if it had or not sufficient faculties for it. In conclusion, the argument thus then exist a right which was affected in grounders, as neither prior to nor after the amendment such a right exists.

C. Authority to Conduct a Sua Sponte Review of The Competency of the Investigating Authority

The Panel reviews the extent of its authority to conduct a sua sponte review of the competency of the investigating authority. In particular, the Panel reviews whether it is prohibited under Rule 7 of the Rules of Procedure from undertaking a sua sponte review in accordance with the terms of the last paragraph of Article 238 of the CFF. In addition, the Panel examines whether it may apply the last paragraph of Article 238 of the CFF to this case.

1. Rule 7 of the Rules of Procedure

SECOFI and Resistol objected to the Panelís decision to conduct a sua sponte review of competency issues on the basis that the Panel was exceeding its authority under Rule 7 of the Rules of Procedure. 150 Rule 7 of the Rules of Procedure provides that Panel reviews are to be limited to the procedural and substantive issues raised by the parties. 151 Rules 7 provides in pertinent part that:
 

    7. A panel review shall be limited to (a) the allegations of error of fact or law, including challenges to the jurisdiction of the investigating authority, that are set out in the Complaints filed in the panel review; and (b) procedural and substantive defenses raised in the panel review. 152 The purpose of Rule 7 is to ensure that a panel has before it the information necessary to make an informed decision, and that the parties have an opportunity to be heard on issues upon which a panelís decision may rest. Rule 7 is designed to eliminate prejudice caused to parties that are surprised by the addition of issues that they neither had time nor opportunity to address in their briefs or oral arguments. By requiring that parties be timely heard on issues that will form the basis of the decision, Rule 7 prevents a panel from making decisions on issues not related to the final determination which is the subject of the review. In the case of Certain Softwood Lumber Products From Canada, a U.S.-Canada Free Trade Agreement binational panel proceeding, the Panel interpreted Rule 7 in accordance with its purpose. 153
In that case, the U.S. Department of Commerce argued that the Panel lacked authority under Rule 7 to decide certain issues on grounds that the Canadian Complainants did not cite the issues in their complaint. 154

The Panel found that Rule 7(a) was:
 

    ...designed to assure that when a major procedural or substantive issue was brought before the Panel, the other Parties will have a timely opportunity to respond in such a manner to assure that the Panel has before it all necessary information to make an informed decision. 155 The panel rejected the Department of Commerceís arguments on grounds that the purpose of Rule 7(a) had been fulfilled as all parties had a timely opportunity to respond in a manner that allowed the Panel to make an informed decision, and prevented prejudice to the parties.

    In this case, the purpose of Rule 7 has been satisfied. The competency issues were raised early in the proceedings in a context that demonstrated a relationship with the final determination under review; the parties were not prejudiced as they had the opportunity to be heard; and the Panel had before it the information necessary to make an informed decision. Muehlstein first raised the competency issues in its motion to amend wherein it argued that the Steel Plate Decision applied to this case. 156

Muehlstein does not claim, nor does the Panel find, that it was prejudiced by the Panelís decision to undertake a sua sponte review. Resistol raised competency issues in its response brief with arguments that SECOFI was competent during the investigation. 157 Resistolís arguments demonstrate that it was familiar with, and concerned about, issues concerning the competency of the investigating authority. It, too, was not surprised or prejudiced by the Panelís decision to undertake a sua sponte review.

As a result of its participation in the Steel Plate review, SECOFI was intimately familiar with the issues concerning its competency. 158

SECOFI was neither surprised or prejudiced by the Panelís decision to conduct a sua sponte review. Once the Panel issued its decision to undertake a sua sponte examination of competency issues, the parties were provided with ample opportunity to study and present their respective positions. 159 The parties submitted briefs, response briefs, and reply briefs, and participated in a full day of oral argument devoted solely to competency issues. In conclusion, in this case, rule 7 from conducting a sua sponte review the Panel was not prohibited by, pursuant to the last paragraph 238 of the CFF.

D. Competency of the Investigating Authority

1. Competency Criteria

a. Competency Under the NAFTA

Article 1904 of the NAFTA contemplates that final antidumping and countervailing duty determinations that are subject to review are those that have been issued by a competent investigating authority. Indeed, paragraphs 2, 3, 4, 7, and 8 of Article 1904 all refer to the investigating authority as competent. Accordingly, final determinations are reviewable only in those cases where the concerned investigating authority is competent, and, a binational panel may undertake a review only if the involved investigating authority is competent. In accordance with the foregoing, it would be highly irresponsible for a binational panel in the course of a review of a final determination to recognize the competency of the investigating authority without determining whether such competency actually exists, in particular in cases where issues regarding such competency have been raised.

For its part, NAFTA Annex 1911 expressly provides that, in the case of Mexico, "competent investigating authority" refers to the designated authority within SECOFI, and that "final determination" refers to a final determination by SECOFI in accordance with Article 13 of the Ley Reglamentaria, as amended. 160

It is evident, therefore, that binational panels are empowered under the NAFTA to review final determinations solely in cases where the concerned investigating authority is competent, and, as a result, panels have an obligation to ensure that the investigating authority, whose final determination is subject to the review, is competent. Pursuant to the aforementioned provisions of the NAFTA, in this case there is no question that the "competent investigating authority" is SECOFI, and that the authorities it has designated within with resepct to the issuance of final determinations are the authorities which represent it in accordance with Mexican law.

b. Competency Under Mexican Law

In accordance with the above cited NAFTA provisions, and fully aware that its decision to consider whether the investigating authority is competent has been the subject of diverse scholarly opinions, the Panel has determined (consistent with the conclusions the Panel reached concerning the application of the last paragraph of Article 238 of the CFF) to consider these issues in accordance with Mexican law.

Article 90 of the Constitution provides that the Federal Public Administration, pursuant to organic law passed by Congress, shall assign to the nationís Ministries the administrative matters of the Federation. The Panel finds that, on the basis of the aforementioned constitutional provision, and in accordance with the applicable secondary law, the Ley Orgánica de la Administración Pública Federal, within each Ministry there exists a Secretary whom, with respect to those matters for which he is competent, is assisted by an Under Secretary and other officials, as provided by law. In addition, Article 16 of the aforesaid Ley Orgánica establishes that the Secretaries of the Ministries are primarily authorized for undertaking and discharging all matters for which they are competent, and may for organizational purposes delegate that authority to other officials (including the Under Secretaries), except for such authority which the law provides can only be exercised by a Secretary. 161

In addition, the Panel must in this review take into account the Ley Reglamentaria (cited above in relation to NAFTA Annex 1911, although its was repealed under transitory Article 2 of the Foreign Trade Law). NAFTA Annex 1911, in fine, refers to the Ley Reglamentaria, which applies to this case. In any event, both the Ley Reglamentaria, at Article I, sections 1 and 2, and the Foreign Trade Law, at section VII of Article 5, provide that SECOFI is authorized to undertake and resolve unfair trade practice investigations, and to establish compensating duties as a result of those investigations. 162 There is no question that the Final Determination was dictated and issued by SECOFI. The Final Determination manifests that SECOFI initiated the investigation; published the notice of initiation in the DOF; notified the exporters and importers named in the case; requested that the named exporters and importers and all other interested parties appear and present information; notified the Governments of the United States and Germany; issued questionnaires; analyzed the information submitted during the preliminary investigation; and issued the Final Determination. 163

The last paragraph of Article 238 of the CFF contemplates the possibility of a sua sponte review of the competency of the investigating authority to dictate a resolution, such as the one challenged in this case. The Panel finds that the issuance of the Final Determination, was a culmination of the procedure undertaken by SECOFI in connection with the underlying administrative investigation. In addition, the last paragraph of Article 238 of the CFF permits a sua sponte determination of a complete absence of findings of fact and conclusions of law in the challenged determination. In this case, it is clear that there is no such absence, much less a complete absence. The competency of the investigating authority exists prima facie, and defects or legal deficiencies are not evident in, nor can be attributed to, the Final Determination.

On the basis of the foregoing, the Panel finds, without reservation, that the investigating authority which acted in this case was competent, in particular with respect to the issuance of the Final Determination. In addition, it cannot be determined, as established in other parts of this decision, that there was an absence, much less a complete absence, of findings of fact and conclusions of law in the Final Determination. These are the only two matters which the Panel may, in its opinion, review sua sponte, and this decision emphasizes that the Panelís determination which resulted from the its sua sponte review that the investigating authority is competent, and that the Final Determination contains sufficient findings of fact and conclusions of law. 164

VI. PANEL ORDER

Regarding with the above the Panel Confirms the final determination.

Issued in Mexico, Distrito Federal, September 12, 1996.

    Jimmie V. Reyna

    Miguel Y. Estrada Sámano

    Héctor Cuadra y Moreno

Continue on to Concurring Opinion of Panelist Rosch


1 North American Free Trade Agreement, issued on August 12, 1992, revised on September 6, 1992, signed on December 17, 1992, published in the Diario Oficial of the Federación (hereafter "DOF") on December 20, 1993, went into effect on January 1, 1994, hereafter NAFTA.

2 Final Determination of the Antidumping Administrative Investigation Proceeding Covering Imports of Polystyrene Crystal and Iimpact, as contained in tariff numbers 3903.19.02, 3903.19.99, 3903.90.05 y 3903.90.99 of the Harmonized Tariff System, from Germany and the United States of America, published in the DOF, on November 1994. Exp. Adm., Vol. 3, folio s/n (hereafter "Final Determination").

3 Código Fiscal de la Federación (Federal Tax Code), published in the DOF on December 31, 1981.

4 Exp. Adm. Públ. Vol. 1, folio 0014. Citations to the administrative record are made in the following manner in accordance with the oficial index: "Exp. Adm." means administrative record, "Publ." means public, "Conf." means confidential; "Vol." means the volume in which the document is contained, and "folio" referes to the number of the document. All the references in this Decision are from public records.

5 Pursuant to disposed what is in the Annex 1904.15 of the NAFTA, the Provisional determination that declares the initiation of the administrative investigation will be refered to hereafter as "Initial Resolution" and the "Resolution that revises the Provisional Resolution", will be "Provisional Resolution."

6 Resolution that declares the initiation of the investigation covering imports of polystyrene crystal and impact, products included in the tariff numbers 3903.19.02, 3903.19.99, 3903.90.05 y 3903.90.99 of the Harmonized Tariff System from Germany and the United States, published in the DOF on March 5, 1993, at 28-31; Exp. Adm., Vol. 1, folio s/n, (hereafter "Initial Resolution").

7 Determination which reviews the provisional determination which declared the initiation of the administrative antidumping investigation covering imports of polystyrene crystal and impact, products contained in tariff numbers 3903.19.02, 3903.19.99, 3903.90.05 y 3903.90.99 of the Harmonize Tariff System, from Germany and the United States of America, published in the DOF, on November 25, 1993, at 29-38. Exp. Adm., Vol. 3, folio s/n. Hereafter "Provisional Resolution" para. 86, p.38.

8 Exp. Adm., Vol. 3, folio 0343.

9 Final Determination, para. 138, at 21.

10 Final Determination, para. 28 and 62, at 9 and 12.

11 Rev. Rec. MEX-94-1904-03, Vol. 1, doc. 1. Citations to the record of the proceedings before this Panel, are made in the following manner: "Rev. Rec." means "review record"; "Vol." means volume, "doc." means the number of the document.

12 Rules of Procedure of Article 1904 and of Extraordinary Challenged Comitte of the NAFTA, published in the DOF on June 20, 1994.

13 "Notice to Implement Paragraph (2) of the Rule 35 of the Rules of Procedure of artcle 1904 of the Northe American Free Trade Agreement." Secretaría de Comercio y Fomento Industrial. Published in the DOF, on December 19, 1994, p. 55; Rev. Rec., Vol. 1, doc. 25.

14 North American Free Trade Agreement (NAFTA) Artcle 1904. Binational Panel Reviews: Request for Panel Review, 60 Fed. Reg. 2.942 (Notice of First Request for Panel Review) (Dept Comm., 1995).

15 Rev. Rec., Vol. 1, doc. 26.

16 Idem.

17 Investigating Authority, Rev. Rec., Vol. 2, doc. 31; Resistol, Rev. Rec., Vol. 2, doc. 32 Nacional de Resinas, Rev. Rec. Vol. 2, doc. 30.

18 Rev. Rec., Vol. 4, doc. 43.

19 Rev. Rec., Vol. 5, doc. 38.

20 "Notice of the Suspension of the Panel Review of the Final Determination of the Antidumping Administrative Investigation Proceeding on the imports of polystyrene crustal and impact, from Germany and the United States of America, published in the DOF on May 9, 1995. Rev. Rec., Vol. 5, doc. 84.

21 "Notice of Conclusion of the Suspension of the Panel Review of the Final Determination of the Antidumping Administrative Investigation Proceeding on the imports of polystyrene crustal and impact, from Germany and the United States of America, published in the DOF on October 31, 1995. Rev. Rec., Vol. 5, doc. 130.

22 To see the content of said Motions and Orders, see infra "Motions and Orders".

23 Resistol, Rev. Rec. Vol. 6, doc. 222; Investigating Authority, Rev. Rec., Vol. 6, doc. 223.

24 Rev. Rec., Vol. 7, 295.

25 Rev. Rec., Vol. 10, doc. 396, Transcript.

26 Rev. Rec., Vol. 11, doc. 403.

27 Rev. Rec., Vol. 11, doc. 414.

28 Rev. Rec., Vol. 15, doc. 587.

29 Rev. Rec., Vol. 16, doc. 676, Transcript.

30 Rev. Rec. Vol. 5, doc. 159.

31 Final Determination of the Antidumping Administrative Investigation Proceeding Covering Imports of Products of Steel Plate from United States of America, published in the DOF on September 11, 1995, (hereafter "Steel Plate Decision").

32 Rev. Rec., Vol. 11, doc. 403.

33 Investigating Authority, Rev. Rec. , Vol. 6, doc. 183 y Rev. Rec., Vol. 6, doc. 214; Resistol, Rev. Rec., Vol. 6, doc. 198; Nacional de Resinas, Rev. Rec., Vol. 6, doc. 206.

34 Resistol, Rev. Rec., Vol. 8, doc. 333, December 28, 1995; Investigating Authority, Rev. Rec. Vol. 8, doc. 325, December 26, 1995.

35 Rev. Rec., Vol. 11, doc. 428; Vol. 12, doc. 506.

36 SECOFI, Rev. Rec., Vol 11, doc. 450; doc. 498; Resistol, Rev. Rec.. Vol. 11, doc. 442.

37 Rev. Rec. Vol. 11, doc. 458 and Vol. 12, doc 514.

38 Rev. Rec.., Vol 13, doc 157, March 11, 1996; Rev. Rec. Vol. 14, doc 563, March 14, 1996; Vol 14, doc. 571: March 25, 1996, Rev. Rec. Vol. 13, soc. 555, March 12, 1996

39 Rev. Rec., Vol. 13, doc. 539.

40 Rev. Rec., Vol. 15, doc. 608.

41 Rev. Rec., Vol. 18, doc. 687.

42 North American Free Trade Agreement of América of the North, edited 12 of August of 1992, inspected 6 of September of 1992, signed 17 of December of 1992, published in the DOF 20 of December of 1993, in force from 1 of January of 1994, in thereinafter NAFTA.

43 Ley Reglamentaria del artículo 131 de la Constitución Política de los Estados Unidos Mexicanos en materia de Comercio Exterior, (Regulatory Law of Article 131 of the Political Constitution of the Mexican United States in foreign trade matters), published of the DOF 13 of January of 1986.

44 In the Mexican Law the TFF has jurisdiction for reviewing final determinations regarding antidumping matters, Ley Orgánica del Tribunal Fiscal amended on December 15, 1995, see Article 11 section XI.

45 NAFTA Article 1904(2)

46 NAFTA. Article 1904(3)

47 NAFTA, Article 1911

48 Decreto por el que se expiden nuevas leyes fiscales y se modifican otras (Decree which contains amendements of outstanding tax laws and regulation and issuance of new tax laws and regulations) hereafter decree, published in the DOF on december 15, 1995, in effect from January 1st of 1996.

49 The reason of the application of this paragraph is discussed in the title V (1) and subsequent of this resolution.

50 See Final Determination, page 21, paras. 141 y 145.

51 Initial Resolution, p. 28.

52 See Id. at 31, paras. 28-30; Final Determination at 7, para. 14.

53 Provisional Resolution, page 29.

54 Pub. Admin. Rec. Vol. 8, doc. no. 1343. Citation to the administrative record is a follows: "Pub." signifies that the document cited is public or nonconfidential; "Non-Pub." signifies that the document cited is not public, or confidential; "Vol." signifies the volume in which the document is located; "doc. no." signifies the document, or folio, number of the document.

55 Final Determination at 9, paras. 28, 62-63.

56 Article 2, section II of the Unfair International Trade Practices Regulations (hereafter "regulations").

57 Final Determination at 11-12, para. 62.

58 Final Determination at 12, para. 63.

59 Muehlstein Brief in Chief at 8-11, April 10, 1995 (hereafter referred to as "Muehlstein Brief").

60 Muehlstein Brief at 10.

61 Idem at 12-14.

62 Id. at 12-14.

63 Id. at 13.

64 Id. at 14.

65 Id. at 14-15.

66 Id. at 14.

67 Id. at 15.

68 Id. at 15-16.

69 Id. at 20.

70 Id. at 16.

71 See e.g. Article 16 of the Constitución Política de los Estados Unidos Mexicanos (hereafter "Mexican Constitution").

72 SECOFI argues in its Response Brief that it had such discretionary authority. SECOFI Response Brief, December 4, 1995, page 22, 24 (hereafter "SECOFI Response Brief") .

73 Article 2 of the Regulations.

74 Whether Muehlsteinís home market sales were made in the course of normal commercial operations, or were of products similar or identical to the products subject to the investigation is not at issue in this case.

75 Final Determination at 12, para. 62.

76 SECOFI Response Brief at 22.

77 SECOFI Response Brief at 32.

78 See Article 2, section II, para. A of the Regulations (third- country price must be representative).

79 SECOFI Response Brief at 22.

80 Article 2, section II, para. B of the Regulations.

81 Mexican Constitution, Article 89 section 1.

82 Mexican Constitution, Article 131, second paragraph.

83 Implementing Law of Article 131 of the Mexican Constitution for Foreign Trade Matters, Chapter 1, Article 1, section 1 and paragraph c (hereafter "Implementing Law"). Although repealed by the enactment of the Foreign Trade Law, the Implementing Law was in effect during all times material hereto.

84 Implementing Law, Article 2 section II, and the second paragraph. Although not applicable in this case, the Panel notes that the Foreign Trade Law was enacted in September 1993 to, among other things, regulate

85 Federal Public Administration Organic Law, Article 34, sections I, V, and VI.

86 See Preamble and Article 2 of the Regulations.

87 Discretionary Authority Definition:

The discrecionary authority appears with in the administrative laws as a consecuence of the execution of an express faculty. Said authority is founded in a law or a regulation which gives to the executive branch free appreciation faculties to decide either to act or not, when to act, how to act and which would be the subject of the act and which would be the subject of the act, as refered by Bonnard: the Discretionary Authority consist on the free faculty even to the administrative branch to decide what is appropiate to do. The Discretionary Authority consist in powers of the state agencies to decide whether to act or not, establishing the limitations and subjects of the acts, considering the appropiatness, the necesity, the technic, the justice and the equality, or the reasons to act in one way or another, accordance to the limitations established by law.

88 See ejecutoria: Instancia: Tribunales Colegiados de Circuito

Fuente: Semanario Judicial de la Federación

Época: 8A

Tomo: VIII-Octubre

Página: 181

ITEM: DISCRETIONARY AUTHORITY, OBLIGATIONS THAT SHOULD BE FULFILLED WHEN THE EXECUTION OF TEXT: When the administrative authority executes the discretionary authority has a wider freedom to decide, this does not grant a ilimited power, having the obligation, under correct administration, to follow in its authority acts certain principles or limitations as reasonables which can only be or limitations as reasonables which can only be founded in adecuate findings of fact and conclusions of law even more precise that when its acts are founded in specifics legal provisions with the objective of showing legality of said act: likewise, the act should be founded or should consider true or in public and notorious facts, contained in the case file, and finally to be proportional between the used measure and pretended objective.

CUARTO TRIBUNAL COLEGIADO EN MATERIA ADMINISTRATIVA DEL PRIMER CIRCUITO

89 See Amparo en revisión 1214-91 Justo Ortego Ezquerro, 13 de junio de 1991. Unanimidad de votos. Potente: Hilario Bárcenas Chávez. Secretario: Fernando A. Ortiz Cruz.

90 See e.g. generally GATT Antidumping Code.

91 As noted infra (at Section G), the Panel does not reach a decision concerning the actual percentage criteria adopted by SECOFI under the representative test.

92 Muehlstein Brief at 13.

93 The Panel rejects SECOFIís argument that its "administrative practice" has been to disregard internal market sales as the basis for normal value when these sales are less than fifteen percent of worldwide sales. SECOFI confuses an administrative act with an "adminstrative practice." An administrative practice is formed overtime through a series of administrative acts (such as an interpretation of a regulation or application of a discretionary act) which are consistant and uniform in their application and which provide a basis by which parties in an antidumping proceeding may know precisely how SECOFI will respond in particular situations, or to a particular set of facts. Administrative practices create certainty and transparency to antidumping proceedings. The Panel does not find that such an adminstrative practice was in place at the time of the underlying investigation.

94 Article 2, section II of the Regulations.

95 Official Questionnaire section 3.2, Public Admin. Rec., Vol. 8, Doc. 150, folio 0343.

96 Muehlstein Brief at 13.

97 Muehlstein Brief at 13.

98 Id.

99 Muehlstein Brief at 13.

100 Homopolimeros de los Estados Unidos, Diario Oficial, 23 diciembre 1993, punto 68, página 41 ( donde SECOFI determino que . . . ); Lamina Galvanizada de los Estados Unidos, Diario Oficial, 2 agosto de 1994, punto 31, página 5 (donde SECOFI determino que . . . )

101 Foreign Trade Law Regulations, published in the Diario Oficial December 30, 1993.

102 See Article 42 of the Foreign Trade Law Regulations (sales do not permit a valid comparison if they are not representative).

103 VICIOS DE PROCEDIMIENTO

Los vicios de los actos procesales consisten en lo que hay en ellos contrario a las normas jurídicas que rigen la formación del acto. Este ha de llevarse a cabo de acuerdo con dichas normas, y si tal cosa no se realiza, el acto adolece de un vicio que le resta eficacia jurídica, en mayor o menor grado, según las circunstancias. Diccionario de términos procesales, Eduardo Pallares, Editorial Porrúa, México DF, 1978.

104 Counsel for Muehlstein conceded during oral argument that there is no such statutory or regulatory requirement. See Transcript of Public Hearing, April 18-19, 1996, at 223-225.

105 Rule 39 of the Rules of Procedure require that a complaint set forth the precise nature of the complaint, including the applicable standard of review, and allegations of errors of fact or law. Rule 39 (2)(b) of the Rules of Procedure for Article 1904 Binational Panel Review, published in the Diario Oficial June 20, 1994 (hereafter Rules of Procedure).

106 NAFTA Annex 1904.15(l) requires "the preparation of summaries of ex parte meetings held between the competent investigating authority and any interested party and the inclusion of in the administrative record of such summaries." During oral argument, SECOFI did not deny that a meeting between Muehlstein and SECOFI official occurred. The absence of a summary of that meeting is troublesome.

107 This panelís decision must be based entirely on the administrative record. NAFTA Article 1904.

108 Article 20 of the Regulations.

109 See generally Articles 13 through 20 of the Regulations.

110 See Resolución Final de la Investigación Antidumping sobre las Importaciones de Aditivos para Gasolina, mercancía comprendida en las fracciones arancelarias 3811.11.99 y 3811.19.99 de la Tarifa de la Ley del Impuesto General de Importación, originaria de los Estados Unidos de América independientemente del país de procedencia (July 5, 1995 - ); Resolución Final de la Investigación Antidumping sobre las Importaciones de Cerraduras de Pomo o Perilla mercancía comprendida en la fracción 8301.40.99 de la Tarifa de la Ley del Impuesto General de Importación, originaria de la República Popular de China (May 2, 1994 - August 14, 1995); Resolución Final de la Investigación Antidumping sobre las Importaciones de Carne de Bovino y despojos comestibles, mercancía comprendida en las fracciones 0201.30.01, 0202.30.01, 0206.21.01, 0206.22.01 y 0504.00.01 de la Tarifa de la Ley del Impuesto General de Importación, originaria de los Estados Unidos de América.

111 Generally, an antidumping duty investigation has two stages which, for purposes of this resolution, are called the preliminary stage, which consists of the period between publication of the notice of initiation and preliminary determination, and the final stage, which consists of the period between publication of the preliminary and final determinations.

112 For example, during the preliminary stage, parties may submit comments regarding data presented by other parties; submit supplemental or additional information either voluntarily or in response to a request by SECOFI; participate in the verification process, including submission of supplemental or additional information pursuant to verification; meet with SECOFI officials; and present arguments in support of their positions. See e.g. Final Determination at 8.

113 Admin. Pub. Rec., Doc. No. 0343, January 17, 1994.

114 Under NAFTA Annex 1904.15(f), parties involved in a Mexican antidumping duty proceeding are to be provided an opportunity "to present facts and arguments in support of their positions prior to any final determination, to the extent time permits . . ." While the provision arguably applies to the preliminary stage of antidumping investigations, the provision evokes a spirit of transparency and fair play which the Panel finds absent in this case.

115 The regulations require, for example, verification, the publication of a preliminary determination which contains findings of fact and conclusions of law which underlie its determination with respect to each party. Articles 11, 13 of the Regulations; Articles 13, 16, 17, 18, 21 of the Implementing Law. In addition, the Antidumping Code requires that each party be afforded an opportunity to present information. Article 6.1 of the GATT Antidumping Code.

116 For purposes of the English translation of this opinion, the term "fundamentación y motivación" as used in section II and the last paragraph of Article 238 of the CFF is translated into English as "findings of fact and conclusions of law." While those terms do not have the same specific meaning, they both generally refer to the underlying factual and legal bases which determinations must articulate.

117 Muehlstein Brief at 12.

118 Article 238, section II, of the CFF.

119 Article 16 of the Mexican Constitution.

120 Instancia :Segunda Sala

Fuente :Apéndice 1975

Parte :III

Sección :Administrativa

Tesis :402

Página :666

RUBRO: FUNDAMENTACION Y MOTIVACIÓN DE. TEXTO: Para que la autoridad cumpla la garantía de legalidad que establece el artículo 16 de la Constitución Federal en cuanto a la suficiente fundamentación y motivación de sus determinaciones, en ellas debe citar el precepto legal que le sirva de apoyo y expresar los razonamientos que la llevaron a la conclusión de que el asunto concreto de que se trata, que las origina, encuadra en los presupuestos de la norma que invoca.

PRECEDENTES: Sexta Época, Tercera Parte: Vol. CXXXII, pg. 49. Amparo en revisión. 8280-67. Augusto Vallejo Olivo. 24 de junio de 1968. Unanimidad de 5 votos. ponente: José Rivera Pérez Campos. Vol. CXXXIII, pg. 63. Amparo en revisión. 9598-67. Oscar Leonel Velasco Casa. 1 de julio de 1968. Unanimidad de 5 votos. Ponente: Alberto Orozco Romero. Vol. CXXXIII, pg. 63. Amparo en revisión. 7228-67. Comisariado Ejidal del Poblado San Lorenzo Tezonco, Ixtapalapa, D.F. y otros. 24 de julio de 1968. Unanimidad de 5 votos. Ponente: Pedro Guerrero Martínez. Séptima Época, Tercera Parte: Vol. 14 pg. 37. Amparo en revisión. 3717-69. Elia Chain. 20 de febrero de 1970. Unanimidad de 5 votos. Ponente: Pedro Guerrero Martínez. Vol. 28, pg. 111. Amparo en revisión. 4115-68. Emeterio Rodríguez Romero y Coags. 26 de abril de 1971. Unanimidad de 5 votos. Ponente: Jorge Saracho Alvarez.

121 See Final Determination at 8, para. 23 (citing Articles 16 and 34 of the Federal Public Administration Organic Law; Article 1, section II, subsection c., Article 2, section II, and Article 13 of the Implementing Law; Article 28 of the Regulations and Articles 1, 2, 3, 4, 6, y 33 section I of SECOFIís Internal Regulations.

122 Id.; see also Final Determination at 12, para. 62 (citing Article 2, section II of the Regulations).

123 Id. at 11 and 12, para 62-63 (sets forth the circumstances peculiar to Muehlstein).

124 Id. at 9 para. 28, 11-12 para. 62-63, and 21 para. 141 (explains the basis for dumping margin established for Muehlstein).

125 Muehlstein Brief at 15-16.

126 SECOFI in its response brief acknowledges that it made a ministerial error in its determination that Muehlsteinís U.S. sales accounted for 1.5 percent of its total sales. SECOFIís asserts that the correct percentages are 1 percent for poliestireno cristal and 5 percent for poliestireno impacto. See SECOFI Response Brief at 5-6.

127 Muehlsteinís Brief at 16.

128 Rev. Rec., Vol. 4, doc. 43.

129 Rev. Rec., Vol. 5, doc. 58. The panel review was suspended until October 23, 1995. Rev. Rec. Vol. 5, doc. 130.

130 See Revisión de la Resolución definitiva de la investigación antidumping sobre las importaciones de productos de Placa de Acero en Hoja Originarios y Procedentes de los Estados Unidos de América, Expediente No. Mex: 94-1904-02 (hereafter "Steel Plate Decision").

131 Id. at 75-94.

132 Muehlstein Motion to Amend The Complaint, November 2, 1995 (hereafter "Motion to Amend"). Review Record Vol.5, doc. 84.

133 Id. at 10.

134 Resistol et al. Brief December 4, 1995 (hereafter "Resistol Response Brief"), at 18-20.

135 Id. at 18.

136 Id. at 20.

137 See Order of the Panel, January 26, 1996, Rev. Rec. Vol. 11, doc. 403.

138 The amendments to the CFF were published in December 1995 and became effective January 1, 1996.

139 NAFTA Article 1904(1).

140 NAFTA Article 1904(2). The term "competent investigating authority" is used throughout NAFTA Chapter 19. See e.g. Article 1904(3), (4), (7), (14); and Annex 1904.15 (f), (k), (o), (q).

141 Annex 1911 provides that, in the case of Mexico, "competent investigating authority" means the designated authority within SECOFI or its successor. Whether a designated authority is competent requires a detailed legal analysis. Compare with the definitions provided with respect to the United States and Canada for which specific governmental agencies or officials are already deemed competent: the Department of Commerce and the United States International Trade Commission, and the Canadian Trade Tribunal or the Deputy Minister of National Revenue for Customs and Excise.

142 Article 16 of the Mexican Constitution.

143 See Order of the Panel, "Resolucion Incidental," February 20, 1996.

144 To date, this Panel has no notice that the Tribunal Fiscal de la Federación has yet to apply the last paragraph of Article 238.

145 The parties were given over 60 days to provide briefs and additional time to submit responses to the briefs filed by the parties.

146 Oral arguments on competency issues were presented at hearings held on April 18, 1996.

147 Article 1904(3) and annex 1911.

148 See for Secofi and Resistol Submission of. February 6, 15 and 16, 1996.

149 Tesis 922. Law Retroactivity.- The private persons cannot adquire rights in dispute with the public interest; When some regulation afects this public interest, there in no retroactivity even when the right exists before the regulation.

150 SECOFI Brief, March 13, 1996, at 28, Transcript of Hearing at 82.

151 Rule 7, Reglas de procedimiento del articulo 1904 y del Comite de Impugnación Extraordinaria del Tratado de Libre Comercio de América del Norte, published in the Diario Oficial on June 20, 1994, at 13.

152 Id.

153 Certain Softwood Lumber Products From Canada, USA-92-1904-01, May 6, 1993. Rule 7 of the United States-Canada Free Trade Agreement Rules of Procedure For Article 1904 Binational Panel Reviews is identical to Rule 7 of the NAFTA Rules of Procedure. See Binational Panel reviews and Extraordinary Challenge Committee; United States-Canada Free-Trade Agreement, 53 Fed. Reg. 53,211 (Notice) (Dept. Comm. 1988), as amended, 54 Fed. Reg. 53,165 (1989); 57 Fed. Reg. 26,698 (1992); 59 Fed. Reg. 5,892 (1994).

154 Id. at 108-109

155 Id., citing, New Steel Rail, Except Light Rail, from Canada, U.S.A. 89-1904-07-07 at 21. In New Steel Rail, the panel refused to consider issues raised for the first time in post-hearing briefs that were submitted twelve days after the hearing, and where no attempt was made to amend the complaint, and no concrete arguments were presented that the issues were relevant to the issues before the panel.

156 See Motion to Modify.

157 See Resistol Response Brief at 18-20.

158 SECOFI asserted that allowing Muehlstein to amend its complaint would cause it prejudice in that it would be deprived of the opportunity to present an adequate response or defense to competency allegations. See SECOFI Brief In Response to Motion to Amend, February 6, 1996, and 15

159 The Panelís decision was issued on February 1, 1996. A short period was provided for the parties to submit briefs, which was extended several times. Overall, the parties had a period of over 60 days to present briefs and prepare for oral argument. In all, a period of over four months elapsed from the time Muehlstein filed its motion to amend the complaint to the day the hearing on competency issues was held.

160 See also Final Determination, para. 23, at 8.

161 See Section E.2, of this decision.

162 See supra note # 85.

163 See Final Determination at 1, 8-9, 22. 164

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