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

DECISION OF THE PANEL
April 30, 1999

PANEL:

John M. Peterson (Chairman)
V�ctor Blanco Fornieles
Eduardo Magall�n
Jorge Alberto Silva
D. Michael Kaye

COUNSEL:

For Columbian Home Products, LLC ("CHP"): King & Spalding (Joseph W. Dorn, Michael P. Mabile, Stephen A. Jones)

For Cinsa, S.A. de C.V. ("Cinsa") and Esmaltaciones de Norte America, S.A. de C.V. ("ENASA"): Manatt, Phelps & Philipps, LLP (Irwin P. Altschuler, David R. Amerine, Thomas P. Ondeck, Ronald M. Wisla)

For the Investigating Authority: U.S. Department of Commerce, Office of the Chief Counsel for Import Administration (Stephen J. Powell, Elizabeth C. Seastrum, Linda S. Chang)

TABLE OF CONTENTS

1. INTRODUCTION

2. BACKGROUND

3. STANDARD OF REVIEW

4. DISCUSSION

   1. Alleged Reimbursement By Cinsa and ENASA
   2. Classification of Sales as Export Price Sales
   3. Decision Not To Deduct Certain Indirect Selling Expenses from CEP
   4. Decision Not To Include Certain Indirect Selling Expenses in Total U.S. Expenses for CEP Profit Calculation
   5. Use of Global Ratio in Calculating Yamaka Expenses
   6. Use of Weight-Based Freight Expense Allocation Methodology
   7. Treatment of Freight Expense on Returned Items
   8. Treatment of Enamel Frit Cost
   9. Treatment of Saltillo Pre-Sale Warehouse Expenses

5. CONCLUSION AND PANEL ORDER

I. INTRODUCTION

This Binational Panel ("the Panel") was constituted pursuant to Article 1904 of the North American Free Trade Agreement ("the Agreement") to review the final results in the ninth administrative review of the antidumping duty order on porcelain-on-steel cookware from Mexico ("POS cookware"), covering the period December 1, 1994 through November 30, 1995. That determination was published in the Federal Register as Certain Porcelain-on-Steel Cookware From Mexico: Final Results of Antidumping Duty Administrative Review, 62 Fed. Reg. 42496 (August 7, 1997).

In conformity with Article 1904.8 of the Agreement, and Part VII of the Rules of Procedure for Article 1904 Binational Panel Reviews ("the Rules"), this panel hereby renders its written decision.

II. BACKGROUND

The parties to this proceeding are Columbian Home Products, LLC ("CHP" or "petitioner"), successor in interest to petitioner General Housewares Corporation ("GHC")¹, respondents Cinsa, S.A. de C.V. ("Cinsa") and Esmaltaciones de Norte America, S.A. de C.V. ("ENASA"), and the U.S. Department of Commerce’s Import Administration ("Commerce" or "the Department"), the investigating authority.

As noted above, this Panel is reviewing the ninth administrative review of the antidumping duty order on POS cookware from Mexico. Commerce initiated that review on February 1, 1996, pursuant to requests made by Cinsa, ENASA and petitioner. The final results were published on August 7, 1997². Timely requests for panel review were filed by Cinsa, ENASA and GHC. The factual background relevant to each issue is set forth separately herein.

III. STANDARD OF REVIEW

The standard of review to be applied by binational panels under the North American Free Trade Agreement in their review of Commerce’s determinations is specified in Articles 1904(2)-(3) and Annex 1911 of the Agreement. These provisions, in turn, require that the applicable standard of review is that set forth in Section 516A(b)(1)(B) of the Tariff Act of 1930, as amended (19 U.S.C. � 1516a(b)(1)(B)). It is well established that this standard is not one of de novo review. Ceramica Regiomontana, S.A. v. United States, 636 F. Supp. 961, 966 (CIT 1986), aff’d per curiam, 810 F.2d 1137 (Fed. Cir. 1987). Instead, the standard of review requires that a panel "hold unlawful any determination, finding, or conclusion not supported by substantial evidence on the record, or otherwise not in accordance with the law." 19 U.S.C. � 1516a(b)(1)(B). Article 1904(3) of the Agreement also specifically provides that decisions of the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit are binding on a panel.

"Substantial evidence" has been defined by the Court of Appeals for the Federal Circuit as "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Matsushita Electric Industrial Co., Ltd. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984). The panel may not substitute its own judgement for that of the agency when there are two legitimate alternative views. Arkansas v. Oklahoma, 503 U.S. 91, 113 (1992). In considering whether or not a decision is "in accordance with law" the panel must defer "to reasonable interpretations by an agency of a statute that it administers. . ." National R.R. Passenger Corp. v. Boston & Marine Corp., 503 U.S. 407, 417 (1992).³

IV. DISCUSSION

The Panel has examined every issue filed for its review and has considered each of the arguments presented concerning the issues.

1. Alleged Reimbursement By Cinsa and ENASA 

The first issue to be considered by the Panel is whether the Department’s determination that Cinsa and ENASA were not reimbursing their affiliated importer for antidumping duties within the meaning of 19 C.F.R. � 353.26(a) was reasonable and otherwise in accordance with law. For the reasons that follow, the Panel affirms the Department’s determination.

1. Factual Background

In the Final Results, the Department determined that Cinsa and ENASA were not reimbursing a U.S. affiliate:

In a public submission to the record of the 10threview, which petitioner has added to the record to this 9th review, respondents Cinsa and ENASA specifically stated that a second capital contribution made in April 1997, by CIC’s affiliate GISSA Holding USA, was provided to ensure that CIC would have enough funds to cover anticipated dumping duties and assessment liability subsequent to the liquidation of 5th and 7th POR entries during the 10th POR. These facts are not tantamount to the "producer or reseller" reimbursing the affiliated importer for antidumping duties. See 19 CFR 353.26(a). Although CIC, Cinsa, ENASA and GISSA share a common ultimate parent, GIS, there is no evidence that the source of this capital contribution was either a producer or reseller of POS cookware. All that is shown by these facts is that the importer’s parent made a cash infusion to cover antidumping liabilities, which is not in itself inconsistent with the reimbursement regulation. Because the record in this review does not support a finding that either producer (i.e., Cinsa or ENASA) was in fact the ultimate source of these funds, we do not find reimbursement within the meaning of 19 CFR 353.26(a) in this review. However, we will examine the possibility further in the context of future reviews of POS cookware from Mexico. . . .

Final Results, 62 Fed. Reg. at 42505.

CHP argues that the Department erred in determining that Cinsa and ENASA were not reimbursing their affiliated U.S. importer for antidumping duties. CHP Brief, at 18. According to CHP, Commerce’s determination that the transfer of funds by an affiliated holding company, Grupo Industrial Saltillo, S.A. ("GIS") to Cinsa’s affiliated importer, Cinsa International Corp. ("CIC"), expressly for the purpose of paying antidumping duties was not reimbursement of antidumping duties within the meaning of 19 C.F.R. � 353.26(a) is unsupported by substantial evidence in the agency record and is otherwise not in accordance with law. Id. at 19. CHP argues further that Commerce’s determination that the reimbursement regulation does not apply in this review is patently unreasonable and inconsistent with prior practice. Id. at 21. Furthermore, CHP reasons, the Dutch Steel⁴ determination indicates that Commerce has reconsidered its reimbursement policy and therefore the review should be remanded for a reconsideration of the evidence. Id. at 23.

According to Commerce, the determination that Cinsa and ENASA did not reimburse their affiliated importer CIC for antidumping duties was reasonable, supported by substantial evidence on the record, and otherwise in accordance with law. Commerce Response Brief, at 12. First, the Department explains, a "producer" or "reseller" within the meaning of the reimbursement regulation did not reimburse CIC. Id. at 15-17. Second, it is not Commerce’s  general practice to treat the different members of a corporate family as if each were a single entity. Id. at 19. Third, Commerce claims its determination in the Dutch Steel cases does not support the application of the reimbursement regulation here. Id. Finally, Commerce asserts that CHP’s arguments as to the "fungibility of money" and the "holding company rule" are barred in this case because of exhaustion of administrative remedies. Id. at 24.

In its Response Brief, at 9, Cinsa and ENASA argue that Commerce was correct in determining that they did not reimburse the affiliated U.S. importer for antidumping duties. Cinsa claims that Commerce’s conclusion is based on the facts of this case and is wholly consistent with its past practice. Id. at 13-14. Cinsa and ENASA note that Commerce has never treated affiliated exporters and importers as "one entity" for purposes of analyzing reimbursement and its approach in this case is consistent with that practice. Id.

Finally, CHP asks that the Panel take note of the Department’s preliminary determination in the eleventh annual review of POS Cookware from Mexico⁵ where the Department preliminarily determined that Cinsa and ENASA were reimbursing a U.S. affiliate.

2. Analysis

Under section 353.26 of the Department’s regulations, 19 C.F.R. � 353.26, in calculating the United States price:

the Secretary will deduct the amount of any antidumping duty which the producer or reseller:

1. Paid directly on behalf of the importer; or  
2. Reimbursed to the importer. . . .

As there is no allegation that Cinsa or ENASA paid antidumping duties directly on behalf of CIC, the question to be answered is whether either company reimbursed CIC for antidumping duties within the meaning of 19 C.F.R. � 353.26(a)(ii).

According to the Department, in order for section 353.26(a)(ii) to be triggered, the producer or reseller itself must make the payment to the importer because:

the Department has reasonably limited its inquiry to the producer and reseller exporters, the parties whose books and records are normally reviewed in the antidumping proceedings, stating repeatedly in the regulation that it applied to reimbursement of an importer only by a producer or reseller.

See Department’s Brief at 17 (emphasis added). The Panel cannot say that the Department’s interpretation of its regulation is unreasonable. As the Department notes, the plain language of the regulation states that the reimbursement must be made by the "producer or reseller," not by the producer’s or reseller’s affiliates. Therefore, given that the evidence on the record shows that GISSA, and not Cinsa or ENASA, made the payment to CIC, and given that there is no evidence on the record showing that Cinsa or ENASA made payments to GIS or GISSA for the purpose of reimbursing CIC, the Panel affirms the Department’s determination that GISSA’s payment to CIC did not constitute reimbursement within the meaning of 19 C.F.R. � 353.26(a)(ii).

In reaching this conclusion, the Panel rejects CHP’s assertion that the Department’s position is inconsistent with its prior practice. According to CHP, the Statement of Administrative Action ("SAA")⁶ to the Uruguay Round Agreements Act ("URAA") states that the Department has "full authority . . . to increase the duty when an exporter . . . reimburses the importer, whether independent or affiliated, for the importer’s payment of duties." CHP Brief at 22, citing SAA at 886 (emphasis added). Although CHP’s citation of the SAA is accurate, it does not mandate a conclusion that the Department’s position is unlawful. The Department’s determination that section 353.26(a)(ii) is triggered only when the producer or reseller makes the payment to the importer is fully consistent with the language in the SAA.

Furthermore, the Department’s decision in Dutch Steel does not compel a different result. See Certain Cold-Rolled Carbon Steel Flat Products From The Netherlands, 63 Fed. Reg. 13204 (Mar. 18, 1998). The portion of the determination that CHP cites in its brief, see CHP Brief at 22-23, states only that a capital infusion can constitute reimbursement of antidumping duties under certain circumstances, not that it always will. Presumably, if it had been Cinsa or ENASA that had made the capital infusion, rather than GISSA, then the Department’s statement in Dutch Steel would have compelled a finding of reimbursement. However, the evidence on the record does not compel such a conclusion.

In any event, the petitioners and respondents in Dutch Steel both addressed the Department’s decision in the case at bar, with the petitioners arguing that the Department’s interpretation of its regulation was incorrect, and the respondents arguing that, given the Department’s interpretation, there was no basis for applying the reimbursement regulation in Dutch Steel. See id., 63 Fed. Reg. at 13215. If the Department had intended Dutch Steel to constitute a change in practice, it presumably would have said so. It did not.

In addition, the Panel is not convinced by CHP’s citation of Departmental practice with respect to the fungibility of money and the allocation of holding company expenses. See CHP Brief at 24-28. None of the cases which CHP cites relate to these concepts as applied in the context of the reimbursement regulation. While CHP claims that the Department’s determination is based on the "false premise" that GISSA’s expenses are "neither tied to revenues generated by Cinsa and ENASA nor provide administrative support to Cinsa’s and 8 ENASA’s businesses," see CHP Brief at 27, it fails to recognize that ISLO, not GISSA, is the holding company which supports Cinsa and ENASA. Given this fact, it is not clear to the Panel why GISSA’s expenses would be tied to Cinsa or ENASA or provide support to those companies’ businesses.

Finally, the Panel feels compelled to address the Department’s preliminary determination in the 11th administrative review. See Porcelain-on-Steel Cookware from Mexico: Preliminary Results of Antidumping Duty Administrative Review, 64 Fed. Reg. 1592 (January 11, 1999). As CHP notes in its brief to this Panel, "an agency’s interpretation of its own regulation that departs from its established administrative practice must be struck down if the agency fails to provide a reasonable explanation for the new interpretation." CHP Brief at 21, citing Atchinson, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 808 (1973). The Department has asserted forcefully – both in the ninth administrative review and before this Panel – that section 353.26(a)(ii) is triggered only when the payment to the importer is made by the exporter or reseller itself, not when the payment is made by another party acting on behalf of, or for the benefit of, the exporter or reseller. Reviewing the preliminary determination, it does not appear to the Panel that the Department has explained why its interpretation in the ninth review should no longer apply. That, however, is a question that a future Panel may be called upon to address. It is not germane to the current proceeding.

2. Classification of Sales as Export Price Sales

The second issue that the Panel must address is whether the Department’s decision to classify Cinsa’s FOB Laredo sales as export price ("EP") sales, rather than constructed export price ("CEP") sales, was reasonable and otherwise in accordance with law. For the reasons that follow, the Panel affirms the Department’s determination.

1. Factual Background

In its Final Results the Department determined that:

Cinsa and ENASA both state that sales to the U.S. are made on both an EP and a CEP basis. With respect to Cinsa, the facts on the record of this review do not contradict the reported classifications. . . . In its March 11, 1996, Section A questionnaire response Cinsa states that affiliated parties Global Imports Inc. (Global) and CIC purchase LG and HG cookware from Cinsa . . . and resell it in the United States. Although the date of sale reported by Cinsa . . . for all such sales is the date of the Global or CIC invoice, not the Cinsa . . . invoice, the record in this review indicates that both invoices are issued within a short time of each other. Cinsa notes in its response that the price for EP sales is agreed upon at the time the U.S. customer places a purchase order with the Cinsa export sales department in Mexico. Cinsa’s response states that the precise quantity of product is not determined until the packing list is prepared for the shipment from Mexico, and CIC or Global issues the invoice to the U.S. customer. Thus, Cinsa and ENASA consider the date of sale to be the date of the Global or CIC invoice. Cinsa indicates that the sales categorized as EP sales are not warehoused by Global or CIC after they cross the border, and the sales data corresponding to these sales show that these sales are made on FOB Laredo terms. According to Cinsa, the duties performed by CIC and Global with respect to the FOB Laredo sales relate primarily to sales processing: issuing payment invoices, accepting payment and forwarding it to Mexico, posting antidumping duty deposits, and clearing products through customs for sales to unrelated customers in the United States. Therefore, for the purposes of this review we will continue to consider sales made through Global and Cinsa as EP sales when the products do not enter the inventory of Global or CIC.

Final Results, 62 Fed. Reg. at 42500.

CHP argues that Commerce erred in classifying Cinsa’s FOB Laredo sales as export price (EP) sales. CHP Brief, at 28. CHP claims that Commerce’s determination that Global’s and CIC’s activities with respect to sale of merchandise that did not enter Global’s or CIC’s inventory in the United States were merely clerical in nature and therefore insufficient to classify 10 these sales as CEP sales was not supported by substantial evidence in the administrative record. Id. at 29. Moreover, CHP argues that there is no evidence to support Cinsa’s claim that sales reported as EP sales were made by Cinsa’s export department in Mexico and not by CIC in the United States. Id. at 35.

In its Reply Brief, at 11-12, CHP argues that Commerce failed to apply properly the test to classify Cinsa’s U.S. sales as EP sales, and as a result its determination to classify certain sales to CIC as EP sales is not supported by substantial evidence on the record. CHP replies that it would be inappropriate for the Panel to address the "customary sales channel" factor because Commerce failed to address this factor in its final results. Id. at 12. Additionally, CHP argues that Commerce’s determination that CIC was merely a sales facilitator with respect to sales classified as export price sales is not supported by substantial evidence on the record. Id. at 13. CHP argues that Commerce’s final results erroneously permitted Cinsa to allocate expenses in a manner consistent with CEP sales, yet obtain the benefits of EP sales classification, a determination which is not supported by substantial evidence and should be remanded to Commerce with instructions to classify Cinsa’s reported EP sales as CEP sales and recalculate the margin. Id. at 19.

Commerce asserts that its classification of Cinsa’s FOB Laredo sales as EP sales was reasonable, supported by substantial evidence on the record and otherwise in accordance with law. Commerce Response Brief, at 29. The FOB Laredo sales were shipped directly to the unaffiliated U.S. customer and the indirect PP/EP sales were part of Cinsa’s customary commercial channel. Id. at 32-33. Additionally, for the FOB Laredo sales, the U.S. affiliate merely processed sales documentation and linked communications with the exporter. Id. at 35. Cinsa performed selling functions in Mexico on these sales and Cinsa set the price for the FOB Laredo sales therefore making them EP transactions, despite the presence of shrink-wrapping by CIC. Id. at 38-42.

Cinsa argues that Commerce properly classified its FOB Laredo sales in the United States as export price transactions. Cinsa Response Brief, at 15. Cinsa reasons that the evidence on the record and Commerce’s past practice indicate that Cinsa has met Commerce’s three-prong test for classifying U.S. sales made before the date of importation as EP sales. Id. at 16-17. Cinsa argues that CHP may not ask the Panel to substitute its own judgment for that of Commerce in remanding the determination. Id. at 17. Commerce’s determination that some sales were properly classified as EP transaction is supported by substantial evidence. Id. at 21.

2. Analysis

Under section 772 of the Act, 19 U.S.C. � 1677a, an export price ("EP") sale is a sale of subject merchandise where the first sale to an unaffiliated purchaser in the United States, or for export to the United States, is made prior to importation. 19 U.S.C. � 1677a(a). A constructed export price ("CEP") sale is a sale where the first sale to an unaffiliated purchaser is made in the United States, either before or after importation. 19 U.S.C. � 1677a(b). In addition, under certain circumstances, the Department will treat certain sales that might otherwise resemble CEP sales as "indirect" export price ("IEP") sales. In order to be classified as an IEP sale, the sale must meet the following three criteria: (1) the merchandise must not be introduced into the affiliated importer’s inventory; (2) the sales channel must be customary between the involved parties; and (3) the affiliated importer must act only as a processor of documents and as a communications link with the exporter. See, e.g., Borusan Holding A.S. v. United States, 16 CIT 278, 281 (1992).

In the administrative review, the Department concluded that Cinsa’s FOB Laredo sales met all of the relevant criteria for classification as IEP sales. Although CHP objects to the Department’s conclusion, it does not dispute that the sales meet the first prong of the three part test. See CHP Brief at 30. According to CHP, however, the sales did not satisfy the second or third prongs. Id. Thus, the Panel must determine whether the Department’s conclusion that the second and third prongs were met is supported by substantial evidence and otherwise in accordance with law.

As noted above, the second criterion under the Department’s IEP test is that the sales channel must be customary between the involved parties. According to CHP, the Final Results failed even to consider whether Cinsa’s FOB Laredo sales met this test. In CHP’s view, the fact that a certain percentage of Cinsa’s sales during the period of review were classified as CEP sales should prevent the Department from concluding that EP is the "customary" channel of trade for Cinsa. CHP Brief at 30-31.

In response, the Department argues that it has been well established over the life of the antidumping order on POS cookware from Mexico that Cinsa has a history of making EP sales through Laredo. See Department Brief at 33. In some review periods, Cinsa has made only EP (or "purchase price") sales, and in others, it has made both EP and CEP sales. See, e.g.,  Porcelain on Steel Cooking Ware From Mexico, 51 Fed. Reg. 18470, 18471 (May 20, 1986) (demonstrating that Cinsa made only purchase price sales in the original investigation); Porcelain-on-Steel Cookware From Mexico, 61 Fed. Reg. 54616, 54617 (Oct. 21, 1996). Therefore, the Department argues, it is evident from the history of the antidumping order that EP sales are a customary channel of trade for Cinsa.

Furthermore, the Department argues that the CIT has recognized that if a majority of a company’s sales are not warehoused by its U.S. affiliate, this indicates that direct shipments are a customary channel of trade. Defendant’s Brief at 33, citing E.I. DuPont de Nemours & Co., Inc. v. United States, 841 F. Supp. 1237, 1250 (CIT 1993).

Having reviewed the arguments of the parties, as well as the evidence on the record and the history of this proceeding, the Panel concludes that the Department has adequately demonstrated that Cinsa’s FOB Laredo sales met the second prong of the IEP test. CHP’s argument that the existence of CEP sales should prevent the Department from finding that Cinsa’s FOB Laredo sales meet the second prong of the test appears to be premised on the idea that there can be only one customary channel of trade, either EP or CEP. CHP has failed, however, to cite any authority for this argument, and the Panel is aware of none. Accordingly, the Panel does not view the fact that Cinsa had CEP sales as fatal to its IEP claim.

A closer issue, however, is the Department’s failure to clearly address the customary channel of trade issue in its discussion in the Federal Register. As CHP notes, it is not permissible for an agency to rely on post hoc rationalizations of agency counsel in support of its determinations. See CHP Reply Brief at 12-13. Moreover, the Panel is not convinced by the Department’s argument that it is "clear" from the fact that it summarized petitioners’ arguments and classified the sales as IEP sales that it adequately addressed the second prong of the IEP test. See Department Brief at 34. In particular, the Panel is not convinced by the Department’s citation of the decision in Ceramica Regiomontana, S.A. v. United States, 810 F.2d 1137, 1139 (Fed. Cir. 1987). See Department Brief at 34. In the Panel’s view, the Department attempts far too often to rely on Ceramica as a way of avoiding the consequences of inadequate explanations.

Nevertheless, as noted above, the Panel concludes that the Department has adequately demonstrated that Cinsa’s FOB Laredo sales met the second prong of the IEP test. In the Panel’s opinion, given the history of this proceeding, there would be little point in ordering a pro forma remand which would only acknowledge what is already abundantly clear from past proceedings: Cinsa has a well established history of making purchase price (now EP) sales to its United States customers, and it is reasonable to conclude that those sales constitute a customary channel of trade.

Finally, we turn to the third prong of the IEP test: whether the affiliated importer acted only as a processor of documents and as a communications link with the exporter. According to CHP, there is no evidence on the record that Cinsa performed selling functions in Mexico with respect to the Laredo sales. See CHP Brief at 33. CHP then posits that if Cinsa performed no selling functions, then Global’s and CIC’s role in the sales process must have been more than ancillary or incidental. Id. In CHP’s view, the magnitude of the selling expenses reported by CIC and allocated to EP demonstrates that its role in the sales process was not incidental. CHP also claims that it was CIC and Global, not Cinsa, that sets the selling price for U.S. sales. Finally, CHP argues that CIC shrink wrapped products for certain EP customers, and that this activity should disqualify Cinsa’s IEP claim.

After reviewing the evidence on the record, the Panel concludes that the Department’s determination that the FOB Laredo sales met the third prong of the IEP test is supported by substantial evidence on the record. First, none of the arguments forwarded by the parties lead the Panel to question the Department’s finding that CIC’s and Global’s activities relevant to the Laredo sales were merely ancillary. The evidence on the record indicates that the activities performed by CIC and Global "relate[d] primarily to sales processing: issuing payment invoices, 15 accepting payment and forwarding it to Mexico, posting antidumping duty deposits, and clearing products through Customs for sales to unrelated customers in the United States." 62 Fed. Reg. at 42500. While CHP speculates that CIC’s and Global’s activities "must have been" more than incidental or ancillary, it provides no evidence to support its assertion. The Panel agrees with the Department, for example, that shrink wrapping is nothing more than an ancillary activity⁷.

Second, the Panel disagrees with CHP’s argument that Cinsa performed no selling activities on the Laredo sales. Contrary to CHP’s assertions, Cinsa stated on the record that it did perform selling activities on the Laredo sales. See Department Brief at 38-39, citing Cinsa supplemental response. Moreover, Cinsa reported indirect selling expenses incurred in Mexico on its EP sales, and nothing on the record leads the Panel to believe that Cinsa’s statement was untrue. The Panel agrees with the Department that CHP has taken out of context the excerpt from Cinsa’s and ENASA’s case brief which it cites as evidence that Cinsa did not incur such expenses. The Panel also agrees with the Department that, based on the record evidence, it was Cinsa, and not CIC, which set the prices for the Laredo sales. See 62 Fed. Reg. at 42500. As discussed above in relation to the second prong of the IEP test, it has been well established over the history of the POS Cookware antidumping order that Cinsa makes EP sales to its U.S. customers.

In sum, the Department’s conclusion that Cinsa’s FOB Laredo sales met the test for classification as IEP sales is supported by substantial evidence and is otherwise in accordance with law. For this reason, the Panel affirms the Department’s determination.

Continuation:  C. Decision Not To Deduct Certain Indirect Selling Expenses from CEP