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

IN THE MATTER OF:

Antidumping Investigation of Mexico into Imports of Flat Coated Steel Products from the United States of America

OPINION AND ORDER OF THE PANEL

TABLE OF CONTENTS OPINION OF THE PANEL

I. INTRODUCTION

A. THE ADMINISTRATIVE PROCEEDING

B. PREVIOUS ORDERS OF THE PANEL

C PANEL HEARINGS AND BRIEFS

A. THE SPECIFIC ACTS AT ISSUE

B. COMPETENCE OF THE OFFICIAL ACTING FOR DGPCI AND DCC

C. THE LEGAL DUTIES AND INTERESTS OF THE U.S. EXPORTERS

D. GUIDANCE FROM PAST AMPARO AND PANEL DECISIONS

E. PARTS OF THE FINAL DETERMINATION DERIVED FROM THE INCOMPETENT ACTS

1. Key Terms In Article 238/I

2. Effect On Inland

3. Effect on Other U.S. Exporters

4. Remedy With Respect To Inland

IV. COMPETENCE OF OFFICIALS INVOLVED IN THE VERIFICATION PHASE

A. COMPETENCE OF OFFICIALS WHO ISSUED THE VERIFICATION ORDERS
1. The Verification Orders

2. The Lawful Exercise of UPCI’s Powers

3. Guidance From Amparo Decisions

4. Administrative Dispositions From Which Administrative Determinations Were Derived

B. THE "P.A." SIGNATURE ON THE LTV VERIFICATION ORDER

C. COMPETENCE OF OFFICIALS WHO PARTICIPATED IN THE VERIFICATION VISITS

1. Claim That Two Of The Units Were Not Legally Established

2. Claim That The Underlying Orders Were Invalid

3. Claim That No Delegation Was Made To Mr. Lerín Mestas

4. Claim That External Consultants Should Not Have Participated

5. Relationship Of The Verification Visits To The Final Determination

D. COMPETENCE OF OFFICIALS WHO REJECTED INLAND’S QUESTIONNAIRE RESPONSES

A. DUMPING ISSUES PRESENTED BY NEW PROCESS
1. Opportunity to Present Cost Information

2. Improper Evaluation of the Cost Information

3. Use of Separate Reconstructed Values for Prime, Secondary and Scrap Steel

4. Relief on the New Process Dumping Issues

B. DUMPING ISSUES PRESENTED BY INLAND

C. DUMPING ISSUES PRESENTED BY USX

1. Computation of The Profit Component

2. Requested Exclusion of Distress Sale

3. The Bank Finance Charge

4. Relief on the USX Dumping Issues

D. DUMPING ISSUES PRESENTED BY BETHLEHEM STEEL CORPORATION

1. Freight Expense Adjustment

2. Allocation of Restructuring Charges

3. Relief on the Bethlehem Dumping Issues

E. DUMPING ISSUES PRESENTED BY IMSA

1. Lack of Cooperation by LTV and Bethlehem

2. Calculation of Profit Margin for LTV and Bethlehem

3. Interest on LTV’s Unsubordinated Debt

4. Method For Allocating Bethlehem’s Restructuring Charges

VII. INJURY ISSUES

A. INVESTIGATING AUTHORITY’S RELIANCE ON THE DICTAMEN TECNICO IN THE DETERMINATION OF FUTURE INJURY 129
1. Allegued Conflict of Interest of Technical Consultant

2. Reliance on the Technical Report

B. ROLE OF THE NOTA NACIONAL IN THE DETERMINATION FUTURE INJURY BY THE INVESTIGATING AUTHORITY.

C. THE INVESTIGATING AUTHORITY’S USE OF AGGREGATED DATA IN DETERMINING THREAT OF FUTURE INJURY

D. THE INVESTIGATING AUTHORITY’S USE OF PRE AND POST-PERIOD DATA IN THE DETERMINATION OF THREAT OF INJURY

E. EXCLUSION OF LTV AND BETHLEHEM IMPORTS FROM THE DETERMINATION OF THREAT OF INJURY

1. Bethlehem’s Exclusion From the Injury Determination

2. LTV’s Exclusion From the Injury Determination

F. PRICE AND VOLUME COMPARISON METHODOLOGIES USED IN THE DETERMINATION OF INJURY

G. THE DETERMINATION OF NO (CURRENT) INJURY TO THE DOMESTIC INDUSTRY BY THE INVESTIGATING AUTHORITY

ORDER

Competence and Formality Requirements

Dumping Issues

Injury Issues

OPINION OF THE PANEL

I. INTRODUCTION

1. This Binational Panel was constituted pursuant to Article 1904 of the North American Free Trade Agreement ("NAFTA") to review a final anti-dumping determination published in Mexico’s Diario Oficial on August 2, 1994 (the "Final Determination") and issued by the Department of Trade and Industrial Development ("SECOFI" or the "Investigating Authority"), as a result of Administrative Proceeding 36/92 conducted by the Unit of International Trade Practices of SECOFI. That Administrative Proceeding considered whether there was dumping of imports from the United States of flat coated steel products, covered by customs tariff classifications 7210.31.01, 7210.31.99, 7210.39.01, 7210.39.99, 7210.41.01, 7210.41.99, 7210.49.01, 7210.49.99, 7210.70.01 and 7210.70.99 of the Tariff Schedule of the General Tax Import Law of Mexico (the "Investigated Products").

A. THE ADMINISTRATIVE PROCEEDING

2. The proceeding was initiated by a provisional resolution issued by SECOFI, published in the Diario Oficial on December 24, 1992, and based on a complaint filed on December 4, 1992 by Industrias Monterrey, S.A. de C.V. ("IMSA").¹ Through notifications dated February 8, 1993, 26 U.S. exporters were notified of the provisional resolution, of the contents of an anti-dumping questionnaire and of a March 8, 1993 deadline for submitting responses for the questionnaire.² These notifications were issued in the name of the Direccion General de Practicas Comerciales Internacionales and a Dirección de Cuotas Compensatorias of SECOFI. Certain of the U.S. exporters submitted responses to the questionnaire on March 8, 1993. ³

3. A resolution revising the provisional resolution was published in the Diario Oficial on April 28, 1993. Then, certain of the U.S. exporters filed additional information and comments.⁴

4. In early July 1993, certain of the U.S. exporters were notified about verification visits for the purpose of verifying information provided by these companies. Notifications dated July 6 and July 8, 1993 were issued in the names of the Unidad de Prácticas Comerciales Internacionales and a Dirección General Adjunta Técnica Jurídica of SECOFI. A notification dated July 14, 1993 was issued in the names of the Unidad de Practicas Comerciales Internacionales and a Dirección de Procedimientos y Proyectos of SECOFI. ⁵. The verification visits occurred in the United States during the last half of July 1993. Reports of the verification visits were prepared. Afterwards, SECOFI’s anti-dumping investigation continued for almost another full year, and included a visit by the Investigating Authority with an unidentified consultant to IMSA’s facilities in Mexico. ⁶. ANNEX A to this opinion is a chronology of key events in the proceeding before SECOFI, of events relating to the competence of administrative units and officials of SECOFI, as well as of the proceeding before the Panel. ⁷. As noted, the Final Determination was published in the Diario Oficial on August 2, 1994. In the Final Determination, SECOFI determined (1) that there was dumping of the Investigated Products from certain companies in the United States, and (2) that the dumped imports from some of these companies presented a threat of injury to the domestic industry that produced like goods in Mexico. In particular, SECOFI determined the following price discrimination margins for exports of the Investigated Products:

Bethlehem Steel Corporation ("Bethlehem")	0%
Inland Steel Company ("Inland")	38.21%
LTV Steel Company ("LTV")	5.4%
New Process Steel Corporation ("New Process")	38.21%
USX Corporation ("USX")	38.21%
All Other Exporters	38.21%

It was also determined that the exports by LTV and Bethlehem did not cause injury and did not represent a threat of material injury to the domestic industry, but that the exports by all other suppliers did present a threat of injury. ⁸.

On September 1, 1994, two of the U.S. exporters, USX and Inland, filed with the Mexican Section of the NAFTA Secretariat a Request for Panel Review of the Final Determination. During October 1994 and pursuant to Rule 39 of the Rules of Procedure for Article 1904 Binational Panel Review, New Process, Bethlehem, USX, Inland, LTV, and IMSA all filed with the Mexican Section of the NAFTA Secretariat complaints presenting issues for panel review. This Binational Panel (the "Panel") was subsequently constituted under Article 1904 of NAFTA.

B. PREVIOUS ORDERS OF THE PANEL ⁹.

The participants in this panel proceeding have filed several motions, which the Panel has decided in previous orders. Following is a summary of the motions that the participants have filed with the Panel, and of the previous orders that the Panel has issued in this binational panel review.

February 27, 1995 ¹⁰.

In response to a motion by SECOFI, the Panel unanimously denied SECOFI’s request that the Complainants be compelled to file their brief on the merits in a single volume as opposed to its filing it in multiple volumes; denied SECOFI’s request that Complainant’s brief on the merits be amended to eliminate certain references that fall outside the administrative record; denied SECOFI’s request that the Complainants be required to "clarify" their brief on the merits in certain respects; and denied SECOFI’s request for an extension of time in which to file a responsive brief.

March 03, 1995 ¹¹.

In response to a motion by Complainants to supplement the Public Record of certain documents omitted from it, to eliminate certain documents from the Confidential Record and place them in the Public Record, and finally to place certain non-Confidential summaries of certain Confidential Documents in the Public Record, the Panel unanimously ordered the following: a) that the Public Record be considered already supplemented with the documents omitted, b) that the Complainant’s request to place in the Public Record certain Confidential documents be denied, and c) that the Complainants requests that non-Confidential summaries be placed on the Public Record be denied.

April 4, 1995 ¹².

In response to a motion by IMSA requiring an extension of time in which to file a responsive brief, the Panel denied it because it had been filed out of time.

April 19, 1995 ¹³.

In response to a motion by SECOFI of lack of standing of Licenciado Luis Manuel Pérez de Acha, Licenciado Luis Rubio Barnetche and Claire E. Reade, the Panel ordered the recognition of Luis Manuel Pérez de Acha as counsel of record of Bethlehem, USX, LTV and Inland and Luis Rubio Barnetche as counsel of record of New Process to the extent that both counsel could demonstrate that they were attorneys at law with authorization to practice Law in Mexico. As to Claire E. Reade, the Panel ordered that she be recognized as providing legal advise but not as counsel of record of New Process May 17, 1995.

In response to a motion by Bethlehem, and later to a motion by USX, LTV and Inland, the Panel unanimously ordered that SECOFI issue an authorization granting access to information contained in the Confidential Record to the counsel of record of Bethlehem, USX, LTV , Inland, New Process and IMSA without any requirement for the posting of a bond or financial guarantee.

June 9, 1995.

15. In response to a motion by the counsel of record of New Process requiring: a) access to certain documents which were absent from the Confidential Record, b) access to privileged information, c) that access be given to the Confidential Record for other legal counsel of New Process, and d) authorization to present a new brief within the following seven days after being allowed access to all the documents in the Confidential Record , the Panel ordered the following: a) to grant access to the only missing document (number 286) which (while the motion was pending) was included in the Confidential Record by the Investigating Authority, b) to deny access to New Process to privileged information because the company did not satisfy the requirements of the NAFTA’s Panel Rules c) to deny access to the Confidential Record to other legal counsel of New Process , d) to grant all parties who had access to Confidential Information five days to file comments regarding document No.286.

May 30, 1996.

16. In response to the motion by the Investigating Authority to increase its time to present oral arguments at the second public hearing and to conduct a prehearing conference before the second public hearing, the Panel granted in part an increase in the time for oral argument to the Investigating Authority and denied the motion for a prehearing conference.

17. In response to the motion filed on May 7, 1996 by the counsel of record of Bethlehem Steel, Inland, LTV and USX, to strike from the record certain documentation submitted by IMSA, the Panel hereby denies such petition, on the basis of Rule 10(1) and (4a) of the Panel Rules.

18. In response to the motion filed on May 30, 1996 by the counsel of record of Bethlehem Steel, Inland, LTV and USX, to supplement the record with certain documents, the Panel hereby denies the motion, on the basis of Rule 52(1) of the Panel Rules, since such documents are not part of the Administrative Record

19. The Investigating Authority and IMSA made submissions to the Panel on September 17,1996, requesting this Panel to consider the decision issued on September 12,1996 in case.MEX-94-1904-03, (concerning imports of crystal and solid polystyrene from Germany and the United States). The Panel decided to delay the issuance of its opinion by one week, until September 27,1996, in order to give the panelists an opportunity to review that decision. However, this Panel, having reviewed the majority and concurring opinions in MEX-94-1904-03, notes that the factual situation in that case with regard to competence issues is quite different from the present case, and, in addition, respectfully disagrees with that panel’s interpretation of the scope of Rule 7 of the NAFTA Rules of Procedure. Consequently, the Panel hereby denies the motion filed on September 23, 1996, by Bethlehem, Inland, LTV and USX in response to the motions filed on September 18, 1996 by IMSA and SECOFI, and requiring this Panel not to give any consideration to the decision issued in case MEX-94-1904-03.

C. PANEL HEARINGS AND BRIEFS

20 Participants in this Panel proceeding have submitted numerous briefs on the merits and participated at a public hearing held in Mexico City on April 21 and 22, 1995. Following the resignation of two Panelists to avoid questions regarding the possible appearance of a conflict of interest, and after the appointment of two new Panelists, a second public hearing was held in Mexico City on June 4, 1996.

21. The Panel has reviewed each of the issues presented for review and has fully considered each of the arguments presented with respect to these issues.

II. THE PANEL’S JURISDICTION AND STANDARD OF REVIEW

22. The status of this Panel and the scope of its authority are critical to this opinion. Thus, it is important to note at the outset that the Panel is not the Fiscal Tribunal, and does not have the same characteristics, attributions and jurisdiction as does the Fiscal Tribunal. While the Fiscal Tribunal’s jurisdiction and competence are governed in their totality by Mexican law, including various provisions of the Fiscal Code, this Panel’s jurisdiction and competence are governed by NAFTA, and by Mexican law only to the extent that NAFTA so provides in specifying the applicable standard of review and in the requirement of Article 1904(2) that the Panel is to apply Mexican law "to the extent that a court of the importing party would rely on such materials in reviewing a final determination of the competent investigating authority." As discussed below, this is a more specific and limited jurisdiction, which may cause the results of a review by the Panel to be different from a review by the Fiscal Tribunal.

23. Like any international arbitral panel, the jurisdiction of a binational panel under NAFTA is limited. It is a principle of international law that in any international arbitration, the members of the panel have a jurisdiction that is strictly limited to the terms under which a matter has been submitted to arbitration. As one commentator has stated: Since the arbitrator derives his powers from the arbitration agreement he is bound by the wording of the agreement when deciding what authority he has to decide a particular dispute. . . . . The arbitration agreement may use a formula that is narrow or broad, conferring jurisdiction to specific types of claims, or for specific damages only. . . .

24.In other words, to determine the jurisdiction of an international panel, one must look at the "wording" of the agreement or treaty under which the panel was constituted. One must determine what particular claims or issues have been submitted for review, and whether jurisdiction has been conferred with respect to the awarding of damages or other remedies.

25. These concerns are particularly significant where the international panel has been created by sovereign nations. As the International Court of Justice has stated: The court is not departing from the principle, which is well-established in international law and accepted by its own jurisprudence as well as that of the Permanent Court of International Justice, to the effect that a State may not be compelled to submit its disputes to arbitration without its consent.

26. In this Panel proceeding, "consent" for Panel review has been expressed by Canada, Mexico and the United States in the North American Free Trade Agreement ("NAFTA"). If this Panel was to decide any claim, apply any standard of review, or award any remedy in a manner that was not expressly provided for under NAFTA, this Panel would risk exceeding the "consent" conferred by the three sovereign nations that are parties to NAFTA.

27. Similarly, under international treaties to which Canada, Mexico and the United States are all parties, one of the few grounds for challenging the enforcement for an arbitration award is that:

Que la sentencia se refiere a una diferencia no prevista en el compromiso o no comprendida en las disposiciones de la cláusula compromisoria, o que contiene decisiones que exceden de los términos del compromiso o de la cláusula compromisoria;

The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration. . . .

28. Additionally, international agreements and treaties are considered to be domestic law under the Mexican Constitution (Article 133). The Mexican Supreme Court has ruled that international agreements and treaties are self-executing, so that national authorities are bound by them without the need of any implementing legislation. Thus, for the purpose of its application in Mexico, NAFTA is to be directly interpreted according to the rules laid out by the Vienna Convention on the Law of Treaties, to which Mexico is a party and which is a part of Mexican domestic law.

29. As discussed below, under NAFTA, the jurisdiction of this Panel is limited in three areas: (A) the claims and defenses that this Panel may review, (B) the standard of review to be applied to those claims and defenses, © the remedies that may be granted in the review.

A. JURISDICTION TO REVIEW CLAIMS AND DEFENSES

30. Our jurisdiction first of all has a temporal limit. A request for a Panel review must be made "within 30 days following the date of publication of the final determination in question in the official journal of the importing Party" ("dentro los treinta dias siguientes a la fecha en que la resolución definitiva en cuestión se publique en el diario oficial de la Parte importadora").10 .In this case, SECOFI’s Final Determination was published on August 2, 1994. Requests for Panel review were filed within 30 days, on September 1, 1994. Therefore, the Panel concludes that the temporal requirement for it to exercise jurisdiction has been satisfied.

31. The Panel’s jurisdiction is defined and circumscribed by NAFTA, Article 1904(6) requires this Panel to conduct its review in accordance with the procedures established under Article 1904(14). Those procedures are entitled: "North American Free Trade Agreement: Rules of Procedure for Article 1904 Binational Panel Review" ("NAFTA Panel Rules"). Rule 7 of the NAFTA Panel Rules limits the jurisdiction of this Panel as follows:

7. La revisión ante un panel se limitará: (a) a los alegatos de error de hecho o de derecho, incluyendo la declinatoria de competencia de la autoridad investigadora, comprendidos en las Reclamaciones presentadas ante el panel: y (b) a los medios de defensa tanto adjetivos como sustantivos invocados en la revisión ante el panel.

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.

32. In other words, if an issue has not been raised in a party’s Complaint, or as a procedural or substantive defense during the Panel review, we have no jurisdiction to consider it.

33. Rule 7 has important implications for this Panel, that may not apply to a national court in Mexico. Rule 7 limits the jurisdiction of the Panel to issues that are raised by the party, and requires us to look individually at each Complaint and at each issue in each Complaint. For example, if the complaint of Exporter A presents the issue of the competence of an official but the Complaint of Exporter B does not present this issue, we may review this an issue only for Exporter A and not for Exporter B. In fact, this situation arose in this case, where some of the U.S. exporters presented the issue of competence in their Complaints, but New Process did not present the issue in its Complaint. We do not have jurisdiction to consider an issue that was not presented in a Complaint of a particular exporter, even though the same issue was presented in the Complaints of other exporters. We note that this is in contrast to the jurisdiction of the Tribunal Fiscal of Mexico, which under a recent amendment to Article 238 of the Fiscal Code, may declare, "sua sponte, because it is a matter of public order, the incompetence of the authority to render the challenged determination and the total absence of basis or motivation of this determination."

34. Rule 7 also means that we must analyze the Final Determination to determine which elements of the Final Determination, if any, are affected by each issue raised in the Complaint of each party. A Final Determination in an anti-dumping proceeding is based on many administrative acts and determinations that have occurred earlier in the anti-dumping proceeding. We do not have jurisdiction to review all of these administrative acts and determinations (as incorporated in the Final Determination) unless they are challenged in a Complaint of a party. If a Complaint does not present a claim relating to an administrative act or determination on which a part of the Final Determination is based, the Panel may not have jurisdiction to review that part of the Final Determination.

On these matters, we respectfully disagree with the panel decision in Case No.Mex-94- 1904-03. The majority in that panel suggested that the purposes of rule 7 were simply to assure (1) that major issues were brought to a panel’s attention and (2) that participants would have a timely opportunity to respond all issues. Those purposes, however, do not appear in the text of NAFTA Article 1904 or in the text of the sovereign nations have established an arbitration or dispute resolution procedure, the arbitrators or panelists must be guided by the text of what sovereign nations have agreed upon. We cannot go beyond the text of Rule 7 to look for purposes by which we might expand the issues over which we have jurisdiction.

B. STANDARD OF REVIEW

36. The standard of review applicable to this proceeding is also determined by NAFTA. This Panel must apply the standard of review set out in NAFTA Article 1904(3) and Annex 1911. It is a two-part standard review.

el criterio establecido en el Artículo 238 del Código Fiscal de la Federación, o cualquier ley que lo sustituya, basado solamente en el expediente.	the standard set out in Article 238 of the Federal Fiscal Code ("Código Fiscal de la Federación"), or any successor statutes, based solely on the administrative record.
Article 238 of the Federal Fiscal Code states:
Se declarará que una resolución administrativa es ilegal cuando se demuestre alguna de las siguientes causales: I. Incompetencia del funcionario que la haya dictado u ordenado o tramitado el procedimiento del que deriva dicha resolución. II. Omisión de los requisitos formales exigidos por las leyes, que afecte las defensas del particular y trascienda al sentido de la resolución impugnada, inclusive la ausencia de fundamentación o motivación, en su caso. III. Vicios del procedimiento que afecten las defensas del particular y trasciendan al sentido de la resolución impugnada. IV. Si los hechos que la motivaron no se realizaron, fueron distintos o se apreciaron en forma equivocada, o bien si se dictó en contravención de las disposiciones aplicadas o dejó de aplicar las debidas. V. Cuando la resolución administrativa dictada en ejercicio de facultades discrecionales no corresponda a los fines para los cuales la ley confiera dichas facultades El Tribunal Fiscal de la Federación podrá hacer valer de oficio, por ser de orden público, la incompetencia de la autoridad para dictar la resolución impugnada y la ausencia total de fundamentación o motivación en dicha resolución.	An administrative determination shall be declared illegal when any of the following grounds are demonstrated: I. Lack of competence of the official who issued, ordered, or carried out the proceeding from which said resolution is derived. II. Omission of the formal requirements provided by law, which affects an individual’s defenses and impacts the result of the challenged resolution, including the lack of legal foundation or reasoning, as the case may be. III. Procedural errors which affect an individual’s defenses and impact the result of the challenged resolution. IV. If the facts which underlie the resolution do not exist, are different or were erroneously weighed, or if (the resolution) was issued in violation of applicable legal provisions or if the correct provisions were not applied. V. When an administrative determination issued in an exercise of discretionary powers does not correspond with the purposes for which the law confers said powers. The Federal Fiscal Tribunal may declare sua sponte, because it is a matter of public order, the incompetence of the authority to render the challenged determination and the total absence of basis or motivation of this determination.12

38. Under the second part of the standard review, we may also consider:

los principios generales de derecho que de otro modo un tribunal de la Parte importadora aplicaría para revisar una resolución de la autoridad investigadora competente.

The first part is the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority.

39. Significantly, the first part of the standard of review specified by NAFTA, namely Article 238 of the Federal Fiscal Code, presents the Panel with several problems. The beginning of Article 238 states: "An administrative determination shall be declared illegal" ["Se declarará que una resolución administrativa es ilegal"]. How should we interpret the words "administrative determination" ("resolución administrativa")? An anti-dumping investigation normally consists of many administrative determinations that concern different subjects and that affect different parties. The text of Article 238 of the Fiscal Code does not state that the words "administrative determination" ("resolución administrativa") mean only the entire Final Determination. The Panel is not aware of any decision of the Fiscal Tribunal interpreting the words "administrative determination" ("resolución administrativa") in an anti-dumping context. Nor does NAFTA Article 1904 or Annex 1911 tell us that we must interpret the words "administrative determination" ("resolución administrativa") to mean only the entire Final Determination.

40. NAFTA Articles 1904(1), (2) and (5) indicate that this Panel may review only a final anti-dumping or countervailing duty determination. In reviewing a Final Determination, however, we review only the portions of the Final Determination that are implicated by an issue raised in a Complaint of a party.¹⁴ Since neither the text of Fiscal Code Article 238 nor the text of NAFTA Article 1904 say that we must declare illegal the entire Final Determination, it appears that this Panel would have the power to declare illegal under Article 238 some of the "administrative determinations" that are included in (or provide the basis for) portions of the Final Determination, and not others. In addition, the limitations on our jurisdiction under NAFTA and the fact that a final anti-dumping determination includes many subordinate administrative determinations indicate that we should interpret the words "administrative determination" ("resolución administrativa") in Article 238 to mean each of the subordinate "administrative determinations" that are included in (or that provide the basis for) portions of the Final Determination.¹⁵

41. The proper application of the standard of review, and any other applicable provisions of Mexican law, is made more difficult by several factors. First, the Panel recognizes Article 238 was originally written for review of administrative decisions relating to taxation and other fiscal matters. Such fiscal matters typically involve a claim by the government against an individual regarding that individual’s obligation to pay taxes to the state. By contrast, an antidumping proceeding is more complex. It involves matters affecting the entire economy of the country, trade relations between two nations, domestic producers and their employees, importers of foreign goods, and the exporters of those goods. Notwithstanding these differences, the NAFTA Parties have directed that the same standard of review, Article 238, be applied. The challenge for a Binational Panel is to apply the required standard of review to a multidimensional proceeding under Mexico’s anti-dumping laws.

42. Second, as far as this Panel is aware, until now the Federal Fiscal Tribunal has not reviewed a final determination by SECOFI in an anti-dumping proceeding under Article 238 of the Federal Fiscal Code. Article 238 has never been applied by the Federal Fiscal Tribunal to review such a final determination. Moreover, there are only a few amparo decisions of Mexican courts. Those amparo courts have jurisdiction that is different from, and broader than, the jurisdiction of either this Panel or the Fiscal Tribunal. Also, for other reasons discussed later in this Opinion, the amparo decisions do not provide the Panel clear guidance either for applying this standard of review or for fashioning an appropriate remedy.

43. This Panel is of course aware that two earlier panels have issued decisions reviewing two Mexican final antidumping determinations ("Panel 02" and "Panel 03").¹⁶ However, the Panel 02 and 03 decisions, while providing useful guidance, are not binding precedents for this Panel. As NAFTA Article 1904(8) provides, "the decision of a panel under this Article shall be binding on the involved Parties with respect to the particular matter between the Parties that is before the panel" but not for other grounds. Thus, this Panel may make a decision that differs from the decision of Panel 02 and 03.

C. POWERS TO GRANT REMEDIES AND ARTICLE 239

44. The jurisdiction of an international arbitration or dispute resolution panel, in this case as defined by NAFTA, may limit the powers of the panel to grant certain remedies as a result of its decision. As discussed above, the jurisdiction and powers of an international panel are defined by the agreement under which the matter was submitted to the panel, and the panel may not exercise powers that are not specified under that agreement. This Panel has jurisdiction to grant only those remedies that are authorized by NAFTA Article 1904(8). This provision of NAFTA states:

8. El panel podrá confirmar la resolución definitiva o devolverla a la instancia anterior con el fin de que se adopten medidas no incompatibles con su decisión.

8. The panel may uphold a final determination, or remand it for action not inconsistent with the panel’s decision.

45. Therefore, unlike the Federal Fiscal Tribunal, this Panel lacks the jurisdiction "to declare a challenged resolution to be a nullity" ("Declarar la nulidad de la resolucion impugnada").¹⁷ Federal Fiscal Code, Article 239/II. Jurisdiction to declare "nullity" does not exist under NAFTA Article 1904(8).

46. The U.S. exporters have argued to this Panel that we should consider Article 239 of the Federal Fiscal Code to be an integral part of our standard of review under Article 238, through the second part of the standard of review as a "general legal principle." A previous panel in Case No. MEX-94-1904-02 accepted this viewpoint. We respectfully disagree, because in our view, the incorporation of Article 239 into the standard of review would constitute an inappropriate expansion of our own jurisdiction and powers. As indicated earlier, we are bound by the powers and jurisdiction provided under NAFTA Article 1904(8). That provision permits this Panel to affirm a Final Determination of SECOFI, or remand the Final Determination for further proceedings, but it does not provide the authority to nullify the Final Determination, as is specifically provided to the Fiscal Tribunal under Article 239 of the Federal Fiscal Code.

47. For this reason, we reject the reasons that have been presented to us for including Article 239 in the standard of review as a statement of the powers of the Panel. We fully appreciate the desirability of having panels and national courts decide cases in a similar manner, as a means of promoting consistency and uniformity in decisions. We understand that the Federal Fiscal Tribunal would apply Articles 238 and 239 together, and in appropriate circumstances might nullify a Final Determination. However, if the Parties to NAFTA wished this Panel to have the authority to grant the same remedies to the parties before it that the Federal Fiscal Tribunal may grant under Article 239, they presumably would have included Article 239 in the standard of review, and would have written NAFTA Article 1904(8) differently, so as to avoid a conflict between Article 1904(8) and Article 239.

48. In other words, we are convinced that under the current text of NAFTA this Panel does not have the same jurisdiction and the same powers as have been conferred on the Federal Fiscal Tribunal. We must act within, and only within, the express limits of the jurisdiction and powers conferred on us.¹⁸

49. In the remainder of this opinion, the Panel considers each of the individual issues presented in the Complaints of the U.S. exporters, and defenses raised during this Panel review. The Panel applies the above standard review to each of those issues and defenses; it considers the extent to which "administrative determinations" incorporated within the Final Determination should be "declared illegal" ("se declarará ilegal") under the standard of review; and it orders remedies permitted under NAFTA Article 1904(8).

Continue on to Section III: Competence of officials before April 1, 1993

¹ See Administrative Record, Version Confidential ("VC") Nos. 2 & 8.

² See Administrative Record (VC) Nos. 32-57.

³ Id. Nos. 84, 97, 100, 105.

⁴ See Administrative Record (VC) Nos. 89, 90, 183, 236, 240, 242, 257, 289, 293, 296, 300, 303, 308, 310, 323, 336, 354, 370, 373, 375, 377, 383, 385, 394, 395, 411, 429, 444, 446, 450.

⁵ Pursuant to section XI of Article 11 Ley Orgánica del Tribunal Fiscal de la Federación, Diario Oficial, December 15, 1995, the Federal Fiscal Tribunal is charged with the domestic judicial review of final determinations in antidumping matters.

⁶ S. Jarvin, The Sources and Limits of the Arbitrator’s Powers, 2 Arbitration International 140, 142-43 (1986).

⁷ Ambatielos Case (Greece v. United Kingdom), [1953] I.C.J. 10, 19.

⁸ Convention On The Recognition And Enforcement Of Foreign Arbitral Awards, New York, June 10, 1958, 330 U.N.T.S. 38 (1959), Article V(1)©. A similar provision appears in another treaty to which Mexico and the United States are both parties. Inter-American Convention on Internation Commercial Arbitration, Panama, January 30, 1975, Organization of American States, Treaty Series No. 42, Article V(1)©.

⁹ See "Contradicción de tesis" 3/92 and binding precedents 13/94 and 14/94. Semanario Judicial de la Federación, 8a. época. Jurisprudencia por contradicción de tesis, volume I, pp. 451 and 511.

¹⁰ NAFTA, Article 1904(4).

¹¹ NAFTA: Annex 1911.

¹² The last paragraph of Article 238 was inserted through amendment published in the Diario Oficial on December 15, 1995, and entered into force on January 1, 1996.

¹³ NAFTA, Article 1904(3).

¹⁴ See Part II/A of this Opinion.

¹⁵ The "contradiccion de tesis" 3/92, on which the binding precedents 13/94 14/94 (cited above) are based, state that where there are overlapping national and international legal rules, for example, the rules that limit the Panel’s jurisdiction and those that confer on the Federal Fiscal Tribunal the power to declare illegal an administrative determination, the rules that should prevail are those specific to the issue at hand. In the present case, this suggests that Article 238 of the Federal Fiscal Code has to be interpreted in light of the specific rules that are applicable to a Panel review, including Rule 7 of the NAFTA Panel Rules.

¹⁶ See MEX-94-1904-02, In the Matter of the Mexican Antidumping Investigation into Imports of Cut-to-Length Plate Products from the United States, August 30, 1995; and MEX-1904-03, In the Matter of Crystal and Solid Polystyrene from the United States, September 12, 1996.

¹⁷ Article 239, section II, Federal Fiscal Code. However, although the Federal Fiscal Tribunal, in contrast with the Panel’s powers, may declare illegal and void a Final Determination, it may only do so with respect to the particular plaintiff ("relative effects of the decision").

¹⁸ For similar reasons, Article 237 of the Federal Fiscal Code is not part of the standard of review we must apply as part of our jurisdiction.