IN THE MATTER OF:

Oil Country Tubular Goods from Mexico; Final Determination of Sales At Less Than Fair Value

DECISION OF THE PANEL

REVIEWING THE FINAL DETERMINATION OF THE INTERNATIONAL TRADE ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

July 31, 1996

Before: Harry B. Endsley (Chairman)

Héctor Cuadra y Moreno

Raymundo-Emilio Enríquez-Sánchez

Frank G. Evans

Daniel G. Partan

Appearances:

Charles Owen Verrill, Jr. and John R. Shane, Wiley, Rein & Fielding, on behalf of the Petitioner, North Star Steel Ohio. With them on brief were Alan H. Price and Peter S. Jordan.

Linda S. Chang, Attorney-Advisor, Office of the Chief Counsel for Import Administration, and

Elizabeth C. Seastrum, Senior Counsel for Countervailing Duty Litigation, Office of the Chief Counsel for Import Administration, on behalf of the Investigating Authority, the International Trade Administration, U.S. Department of Commerce. With them on brief was Stephen J. Powell.

Christopher F. Corr and Richard King, White & Case, on behalf of the Respondent, Tubos de Acero de México, S.A. With them on brief were David P. Houlihan, Richard J. Burke and Kristina Zissis.

I. INTRODUCTION

II. STATEMENT OF FACTS

A. General Background

B. The Final Determination

C. Facts Pertinent to the Challenges to the Final Determination
 

1. Calculation of Financial Expense

2. Calculation of General and Administrative (G&A) Expense

3. Allocation Methodology for Nonstandard Costs

4. Offset for Non-Operating Income

A. Substantial Evidence

B. Deference

C. Limitations On Deference

V. DISCUSSION

A. Calculation of Financial Expense
 
1. Arguments of the Participants

2. Discussion and Decision of the Panel
 

B. Calculation of General and Administrative (G&A) Expense.
 
1. Arguments of the Participants

2. Discussion and Decision of the Panel
 

C. Allocation Methodology for Nonstandard Costs
 
1. Arguments of the Participants

2. Discussion and Decision of the Panel
 

D. Offset for Non-Operating Income
 
1. Arguments of the Participants

2. Discussion and Decision of the Panel

OPINION AND ORDER OF THE PANEL

I. INTRODUCTION

This Binational Panel ("Panel") was constituted under Article 1904(2) of the North American Free Trade Agreement ("NAFTA" ¹) and Title IV of the North American Free Trade Agreement Implementation Act ² in response to a request for panel review of the Final Determination of Sales at Less Than Fair Value: Oil Country Tubular Goods from Mexico ("Final Determination") made by the International Trade Administration of the U.S. Department of Commerce ("the Department") on June 28, 1995. ³

In the Final Determination, the Department determined that oil country tubular goods ("OCGT") ⁴ from Mexico are being, or are likely to be, sold in the United States at less than fair value, as provided in Section 735 of the Tariff Act of 1930, as amended (the "Act"). The period of investigation ("POI") was specified as the six-month period commencing January 1, 1994 and ending June 30, 1994. ⁵

The Request for Panel Review was filed by Tubos de Acero de México, S.A. ("TAMSA"), the sole Mexican respondent in the underlying investigation, on July 25, 1995. ⁶ Complaint’s ⁷ contesting certain aspects of the Final Determination were then filed on August 25, 1995 by both TAMSA ⁸ and North Star Steel Ohio, a division of North Star Steel Company ("North Star") ⁹ who was the Petitioner in the underlying investigation. For purposes of Rule 7 of the Rules of subheadings of the Harmonized Tariff Schedule of the United States, which were listed in full in the Final Determination. Id., at 33568. Procedure for Article 1904 Binational Panel Review ("Panel Rules"), the Panel finds that the allegations of errors of fact and law set forth in the Complaints are adequate to permit panel review of such allegations. ¹⁰

In the Final Determination, the Department calculated the estimated final dumping margin for TAMSA and "all others" to be 23.79 percent (weighted average). ¹¹

Accordingly, this was the rate that the Department directed the U.S. Customs Service to apply against TAMSA and "all others" in the Department’s Antidumping Duty Order, published on August 11, 1995. ¹²

II. STATEMENT OF FACTS

A. General Background

At the administrative level, this case began on June 30, 1994 when North Star filed with the Department its Petition for the Imposition of Antidumping Duties Pursuant to Sections 731 and 732(b) of the Act. ¹³

On July 20, 1994, the Department concluded that the Petition met the requirements of Section 732(b) of the Act and of 19 CFR § 353.12 and formally initiated its investigation of OCTG from Mexico. ¹⁴

Discovery

Discovery by the Department commenced on August 26, 1994 when the Department issued an antidumping questionnaire to TAMSA. ¹⁵

This antidumping questionnaire consisted of a 4- page cover letter, a separate page identifying, inter alia, the official in charge and the POI, and all four sections of the standard questionnaire, Sections A, B, C and D. ¹⁶

The cover letter requested that TAMSA respond "in full" to the antidumping questionnaire, indicating that the response to Section A "must be received no later than September 9, 1994" and that the responses to the remaining sections "must be received no later than September 23, 1994." ¹⁷

Elsewhere in the cover letter, the Department cited statutory time constraints as compelling TAMSA’s response "by the due dates noted above" and emphasized at another point that the requested information should be provided "within the required time period." ¹⁸

In addition, the Department expressly noted that "if the response is not submitted in a timely fashion, we may have to make our determination on the basis of the best information available." ¹⁹ Having asked for and received an extension of time. ²⁰ TAMSA presented its response to Section A of the Department’s questionnaire on September 23, 1994. ²¹

Similarly ²² TAMSA’s Section C response was submitted to the Department on October 11, 1994, ²³ and its Section B response was submitted on November 18, 1994. ²⁴

Based on TAMSA’s Section A response, the Department decided to issue its standard Section E questionnaire (costs associated with further processing operations in the United States), which occurred on September 27, 1994. ²⁵

The cover letter to this request required that TAMSA respond in full "no later than 5:00 p.m. on October 27, 1994." Based upon an approved extension of time, TAMSA filed its Section E response on November 10, 1994. ²⁶

On October 3, 1994, the Department issued the first of three requests concerning particular issues: home market viability, extending the period of investigation, and third country sales ²⁷ TAMSA filed its responses to these requests on October 4, 1994, October 7, 1994, October 17, 1994, October 31, 1994, and January 4, 1995. ²⁸

Subsequently on October 20, 1994, the Department issued a deficiency questionnaire ²⁹ posing various questions concerning TAMSA’s Section A response and requiring that the response to this deficiency questionnaire "must be received no later than 5:00 p.m., November 3, 1994." ³⁰ TAMSA filed its Section A deficiency response on this date. ³¹

On December 7, 1994, having found various deficiencies in TAMSA’s Sections B and C responses, the Department issued another deficiency questionnaire ³² which was required to be submitted "no later than 5:00 p.m. on December 21, 1994." ³³

Having received an approved extension of time, TAMSA filed its Sections B and C deficiency responses on December 30, 1994. ³⁴ On December 28, 1994, the Department informed TAMSA that, based on Petitioner’s November 29, 1994 sales below cost of production allegation ³⁵ it was initiating a cost-of-production ("COP") investigation. ³⁶

The Department enclosed Section D of the questionnaire ³⁷ and required that it be responded to "no later than 5:00 p.m. on Wednesday, January 25, 1995." ³⁸

The Section D questionnaire requested combined COP and constructed value ("CV") data. Having received an approved extension of time, TAMSA submitted its Section D response on February 1, 1995. ³⁹

On February 3, 1995, the Department issued a deficiency questionnaire with respect to TAMSA’s Section E response, as well as its Sections B and C responses ⁴⁰ and required this deficiency response to be submitted "no later than 5:00 p.m. on Friday, February 17, 1995." ⁴¹

Finally, on February 10, 1995, the Department issued another deficiency questionnaire with respect to TAMSA’s Section D response ⁴² requiring a supplemental response to be submitted "no later than 5:00 p.m. on March 3, 1995." ⁴³ TAMSA filed its responses to the Sections B, C, D and E deficiency questionnaires on this latter date. ⁴⁴

Preliminary Findings and Determination

On September 27, 1994, the Department determined TAMSA to be the sole mandatory respondent in this case, on the basis of the fact that TAMSA accounted for at least 60 percent of the exports of OCTG from Mexico during the POI. ⁴⁵

On November 3, 1994, based upon information contained in TAMSA’s Section A response, the Department determined that TAMSA’s home market was not viable within the meaning of section 773(a)(1)(B) of the Act (19 U.S.C. § 1677b(a)(1)(B)) and 19 CFR § 353.48 ⁴⁶ and that Saudi Arabia was the appropriate third country market for this investigation. ⁴⁷

At this stage in the investigation, therefore, the Department’s focus was on the data for TAMSA’s sales to Saudi Arabia, which would be used whenever data on sales in the home market would otherwise be used.

On November 29, 1994, however, North Star alleged that TAMSA’s sales to Saudi Arabia included sales below COP. ⁴⁸

After examining the sufficiency of this allegation, the Department initiated a COP investigation on December 22, 1994, ⁴⁹ in connection with which it issued a Section D (COP/CV data) questionnaire to TAMSA on December 28, 1994. ⁵⁰

Because of the home market nonviability finding, the COP data requested from TAMSA involved the cost-of-production of merchandise sold to Saudi Arabia, while the CV data involved the costs associated with merchandise sold to the United States. The Department issued its preliminary determination on February 2, 1995. ⁵¹

Because the Section D questionnaire response was not due until February 1, 1995, ⁵² the Department was unable to use any of the results of the COP investigation in its preliminary determination. Instead, the dumping margin was calculated solely on the basis of a comparison of the prices for TAMSA’s U.S. sales to the prices for TAMSA’s sales to Saudi Arabia. ⁵³

None of the cost data (relating to financial expense, general and administrative expense, or the allocation of nonstandard costs) which are of central importance in this case were used. The preliminary dumping margin was zero. ⁵⁴

Verifications

From March 13-18, 1995, the Department conducted a cost verification at TAMSA’s plant in Veracruz, Mexico. ⁵⁵

The Department also verified TAMSA’s sales data, which are not directly at issue in this case, from March 20-23, 1995 in Veracruz. ⁵⁶

From April 10-12, 1995, the Department conducted a further manufacturing price verification at the facilities of Texas Pipe Threaders ("TPT"), TAMSA’s subsidiary in Houston Texas. ⁵⁷

From April 18-20, 1995, the Department conducted a further manufacturing cost verification at TPT in Houston. ⁵⁸

Three verification reports were issued: one on April 28, 1995 (respecting TAMSA’s sales and covering both the Veracruz and Houston sales verifications), a second on May 1, 1995 (respecting TAMSA’s COP/CV submissions), and a third, also on May 1, 1995 (respecting TPT’s further manufacturing). ⁵⁹

Hearing The Department held a public hearing on May 19, 1995, in which both TAMSA and North Star participated. ⁶⁰

In anticipation of the public hearing, on May 9 and 16, 1995, the interested parties submitted case and rebuttal briefs. ⁶¹

In its Case Brief, North Star attached a copy of TAMSA’s 1994 unaudited financial statement which TAMSA had filed with the Mexican Stock Exchange (Bolsa Mexicana de Valores) on March 23, 1995. ⁶²

This document has become of central importance to this proceeding. It is a matter of record that TAMSA did not submit this Mexican stock exchange filing to the Department at the Houston cost or sales verification or otherwise. ⁶³

B. The Final Determination

The Department’s Final Determination was published June 28, 1995. ⁶⁴

In making this determination, the Department used the results of the COP investigation for the first time. Based on those results. ⁶⁵ the Department determined that there were no remaining above-cost sales to Saudi Arabia. Pursuant to the regulations, ⁶⁶ the Department therefore compared the prices of U.S. sales for the POI to the constructed value of the products sold to the United States. ⁶⁷

Based on this comparison, the final dumping margin for TAMSA was calculated to be 23.79%. ⁶⁸

In making its Final Determination, the Department accepted the COP/CV data as submitted by TAMSA in its Section D response, with three important exceptions:

(1) The Department revised TAMSA’s financial or interest expense ("financial expense") rate to reflect TAMSA’s consolidated results for the first two quarters of 1994, rather than TAMSA’s 1993 audited consolidated financial statement;

(2) The Department rejected TAMSA’s methodology for allocating fixed costs and variances ("nonstandard costs") in arriving at TAMSA’s cost-of-manufacturing ("COM"), which had been based on finishing line machine time, and substituted another methodology, which was based on standard costs; and

(3) The Department also revised TAMSA’s general and administrative ("G&A") expense rate to reflect TAMSA’s half-year 1994 unconsolidated results, rather than TAMSA’s 1993 audited unconsolidated financial statement. ⁶⁹

In its Final Determination, the Department explained its positions with respect to the modifications it had made to the COP/CV data submitted by TAMSA. As to the issue of financial expense, the Department stated that it had rejected TAMSA’s calculation based on 1993 data because that was not the most current information available and was not indicative of expenses during the POI. ⁷¹

In addition, citing TAMSA’s failure to produce the Mexican Stock Exchange filing ⁷² as independent justification for its application of partial best information available ("BIA"), ⁷³ the Department concluded that using the 1993 data would, in effect, reward TAMSA for "withholding" the Mexican Stock Exchange filing at the time of verification, a result incompatible with BIA principles. ⁷⁴

At the same time, however, the Department stated that it was rejecting North Star’s choice for partial BIA, which was TAMSA’s full-year 1994 financial expense costs, noting that the sudden and severe peso devaluation in December of 1994, well after the POI, made full-year 1994 results unrepresentative of financial expense for the POI. ⁷⁵

As to the issue regarding allocation of nonstandard costs ⁷⁶ the Department explained that it was rejecting TAMSA’s finishing time allocation methodology because it shifted such nonstandard costs to products that undergo more finishing, thus distorting actual production costs; and because that methodology neither reflected machine time for other processes performed nor took into account the real cost drivers for price or efficiency variances and other fixed costs. ⁷⁷

Having rejected TAMSA’s allocation methodology, the Department used total standard cost as the allocation basis for the nonstandard costs, calculating nonstandard costs as a percentage of total standard costs. ⁷⁸

With respect to G&A expense, which TAMSA had calculated and submitted based on its unconsolidated 1993 data, North Star once again argued that partial BIA was appropriate, because TAMSA had "systematically withheld its 1994 consolidated financial statements from the Department." ⁷⁹

The Department noted, however, that TAMSA had provided the 1994 unconsolidated G&A data that the Department had requested and that, therefore, there was no basis to apply BIA. ⁸⁰

Nevertheless, the Department once again decided to reject TAMSA’s G&A calculation based on the 1993 data because it considered that the 1994 unconsolidated data was more representative of the actual POI expenses.

Finally, because the Department elected to use the 1994 data, rather than the 1993 data, for its G&A expense rate calculation, it explicitly declined to reach, in the Final Determination, any other issues concerning the use of 1993 G&A data. ⁸¹

Continue on to Section C: Facts Pertinent to the Challenges to the Final Determination

¹ North American Free Trade Agreement ("NAFTA"), signed at Washington, Mexico City, and Ottawa, December 17, 1992; supplemental agreements signed September 14, 1993; reprinted in H. Doc. 103-159, Vol. I and in 32 I.L.M. 605 (1993) (entered into force January 1, 1994).

² Pub. Law. No. 103-182, approved December 8, 1993, 107 Stat. 2057; codified at various sections of title 19 and several other titles.

³ The Final Determination ("Fin. Det.") was published in the Federal Register at 60 Fed. Reg. 33567 (June 28, 1995) and is also contained in the administrative record in this case at Pub. Doc. 256, Fiche 46, Frame 79. Citations to public documents on the administrative record are designated herein as "Pub. Doc. __, Fiche __, Frame __." Citations to documents containing proprietary (confidential) information are designated as "Prop. Doc.__, Fiche __, Frame __."

⁴ In its scope analysis, the Department determined that oil country tubular goods ("OCTG") are hollow steel products of circular cross-section, including oil well casing, tubing, and drill pipe, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, whether or not conforming to American Petroleum Institute ("API") or non-API specifications, whether finished or unfinished (including green tubes and limited service OCTG products). The scope of these products does not cover casing, tubing, or drill pipe containing 10.5 percent or more of chromium. These products fall into numerous

⁵ Id.

⁶ On file at the Secretariat, U.S. Section. See Rule 34 of the Rules of Procedure for Article 1904 Binational Panel Review ("Panel Rules").

⁷ On file at the Secretariat, U.S. Section. See Panel Rule 39.

⁸ The Complaint filed by Tubos de Acero de México, S.A. ("TAMSA") alleges four different errors of fact or law with respect to the Final Determination, pertaining to (i) the Department’s selection of an appropriate financial or interest expense, (ii) the Department’s method of calculating general and administrative expenses, (iii) the Department’s chosen allocation methodology for nonstandard costs, and (iv) a statement made by the Department in an underlying document with respect to a claimed offset for non-operating income, an issue expressly found to be moot in the Final Determination.See TAMSA Complaint, pp. 2-3.

⁹ The Complaint filed by North Star Steel Ohio, a division of North Star Steel Company ("North Star") alleges a single error of law in the Final Determination, pertaining to the Department’s choice of partial best information available ("BIA") in the calculation of TAMSA’s financial expense. See North Star Complaint, p. 5.

¹⁰ Panel Rule 7(a) states that "[a] panel review shall be limited to [ ] 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..."

¹¹ Fin. Det., 60 Fed. Reg. at 33575.

¹² Antidumping Duty Order, 60 Fed. Reg. at 41056-57.

¹³ Pub. Doc. 1, Fiche 2, Frame 1. As required by statute (Section 732(b) of the Act, 19 U.S.C. § 1673b), the Petition was also filed with the U.S. International Trade Commission ("ITC"). Volume I of the Petition concerned issues of relevance to the Department while Volume II concerned issues of relevance to the ITC, in particular, material injury and threat of material injury by reason of less-than-fair-value imports of OCTG from Mexico.

¹⁴See Decision Memo, Pub. Doc. 6, Fiche 4, Frame 74. This determination was published in the Federal Register on July 26, 1994.See 59 Fed. Reg. 37962 (July 26, 1994), Pub. Doc. 9, Fiche 5, Frame 7.

¹⁵ Pub. Doc. 42, Fiche 11 , Frame 1.

¹⁶Section A of the Department’s standard antidumping questionnaire concerns general corporate information; Section B deals with home market or third country sales, price and expense information; Section C pertains to sales, price and expense information with respect to sales to the United States; and Section D concerns cost-of-production ("COP") and constructed value ("CV"). In a subsequent telephone call, dated August 29, 1994, the Department informed TAMSA that it was not necessary to prepare a response to Section D at that time. Pub. Doc. 43, Fiche 11, Frame 87.

¹⁷ Standard antidumping questionnaire cover letter, Pub. Doc. 42, Fiche 11, Frame 1, at 1.

¹⁸ Id., at 2, 4.

¹⁹ Id., at 2. The Department’s BIA rule appears in 19 CFR § 353.37, which is based on Section 776(b) (19 U.S.C. § 1677e) of the Act. The Department’s cover letters typically state that complete and accurate information must be received by the date and time indicated, absent which the Department may be required to resort to BIA. Such statements were included in the various cover letters sent to TAMSA in this case.

²⁰ The Department granted TAMSA an extension of time for this filing on September 7, 1994. Pub. Doc. 52, Fiche 12, Frame 46. See 19 CFR § 353.31(b)(3).

²¹ Pub. Doc. 72, Fiche 14, Frame 1.

²² TAMSA appears to have timely requested, and received, extensions of time for all filings or submissions not submitted by the original deadline set forth in the questionnaire. The Department has not, in this panel review, suggested otherwise.

²³ Pub. Doc. 92, Fiche 17, Frame 1.

²⁴ Pub. Doc. 124, Fiche 24, Frame 15.

²⁵ Pub. Doc. 78, Fiche 14, Frame 25.

²⁶ Pub. Doc. 116, Fiche 23, Frame 1.

²⁷ Pub. Doc. 116, Fiche 23, Frame 1.

²⁸See Pub. Doc. 84, Fiche 16, Frame 1; Prop. Doc. 16, Fiche 63, Frame 53; Prop. Doc. 19, Fiche 65, Frame 1; Prop. Doc. 23, Fiche 67, Frame 1; and Prop. Doc. 50, Fiche 83, Frame 1.

²⁹ Pub. Doc. 100, Fiche 18, Frame 23.

³⁰ Id., Section A deficiency questionnaire cover letter.

³¹ Pub. Doc. 110, Fiche 21, Frame 1.

³² Pub. Doc. 133, Fiche 25, Frame 76.

³³ Id., Sections B and C deficiency questionnaire cover letter.

³⁴ Pub. Doc. 147, Fiche 27, Frame 1.

³⁵ Pub. Doc. 130, Fiche 25, Frame 25.

³⁶ Pursuant to Section 773(b) of the Act (19 U.S.C. § 1677b(b)) and 19 C.F.R. § 353.51, if the Department has reasonable grounds to believe or suspect that the sales on which it could base the calculation of foreign market value (either home market or third country sales) are at prices below the COP, the Department may, under specified circumstances, disregard those sales. See infra notes 48 and 65. If the remaining above-cost sales are inadequate to calculate foreign market value, the Department will then calculate foreign market value on the basis of CV. COP, as calculated by the Department, will include the cost-of-manufacturing ("COM") (including materials, labor and variable overhead) the subject products sold in the home market or third country, applicable average selling expenses incurred in selling the covered merchandise, and the general and administrative ("G&A") expenses, including financial or interest expense and other non-operating items related to production, that were incurred in the most recently completed fiscal year. This same data would be utilized, if appropriate, to calculate CV, but the latter would also include an addition for profit.

³⁷ Pub. Doc. 146, Fiche 26, Frame 35.

³⁸ Id., Section D questionnaire cover letter.

³⁹ Pub. Doc. 176, Fiche 31, Frame 1.

⁴⁰ Pub. Doc. 181, Fiche 32, Frame 7.

⁴¹ Id., Sections B, C and E deficiency questionnaire cover letter.

⁴² Pub. Doc. 190, Fiche 32, Frame 62.

⁴³ Id., Section D deficiency questionnaire cover letter.

⁴⁴ Pub. Doc. 197, Fiche 33, Frame 1.

⁴⁵ Preliminary Determination ("Prel. Det."), 60 Fed. Reg. 6510 (February 2, 1995). Initially, in addition to the full antidumping questionnaire sent to TAMSA, the Department also issued antidumping surveys to three other potential respondents: Tubacero, S.A. de C.V., Hylsa, S.A. de C.V., and Villacero Tuberia Nacional, S.A. de C.V. None of these companies were made respondents in this investigation.

⁴⁶ Under 19 C.F.R. § 353.48(a), if, during the period of investigation ("POI"), the quantity of "such or similar merchandise" sold for consumption in the home market country is so small in relation to the quantity sold for exportation to third countries (normally, less than five percent of the amount sold to third countries) that it is an inadequate basis for determining the foreign market value of the merchandise, the Department will calculate the foreign market value ("FMV") of the merchandise based on either third-country sales or CV.

⁴⁷Prel. Det., 60 Fed. Reg. 6510. Pursuant to 19 C.F.R. § 353.49(b), the selection of a third country is based on the following criteria:

(1) Such or similar merchandise exported to the country is more similar to the merchandise exported to the United States than is such or similar merchandise exported to other countries, and the Secretary decides that the volume of sales to the country is adequate;

(2) The volume of sales to the country is the largest to any country other than the home market country or the United States; and

(3) The market in the country, in terms of organization and development, is most like the United States market.

⁴⁸ Under the applicable provisions, the Department must eliminate from the pool of home market or third country sales available for price-to-price matching to sales to the United States any sales which are made below cost over an extended period of time, in substantial quantities, and at prices that do not permit recovery of all costs within a reasonable period of time in the normal course of trade. If the remaining above-cost sales are insufficient for price-to-price matching purposes, the Department must match each U.S. sale to its CV, i.e., to the COP for that model as calculated pursuant to Section 773(e) of the Act (19 U.S.C. § 1677b(e). See supra note 36 and accompanying text.

⁴⁹ Pub. Doc. 145, Fiche 26, Frame 32.

⁵⁰ See supra note 37.

⁵¹ Prel. Det., 60 Fed. Reg. 6510.

⁵² See supra text accompanying note 38.

⁵³ Prel. Det., 60 Fed. Reg. 6510.

⁵⁴ Id.

⁵⁵Cost Verification Report, Pub. Doc. 220, Fiche 39, Frame 1. The Department’s Team Concurrence Memorandum, Pub. Doc. 251, Fiche 46, Frame 51, states that the Veracruz cost verification ended on March 17, 1995 and that the Veracruz sales verification was extended to March 24, 1995.

⁵⁶ Sales Verification Report, Prop. Doc. 79, Fiche 95, Frame 1.

⁵⁷ Id.

⁵⁸ Further Manufacturing Cost Verification Report, Prop. Doc. 81, Fiche 97, Frame 24. The Team Concurrence Memorandum, Pub. Doc. 251, Fiche 46, Frame 1, states that the further manufacturing cost verification at TPT took place on April 17-19, 1995.

⁵⁹ See supra notes 55, 56, and 58.

⁶⁰ Public Hearing Transcript, Pub. Doc. 231, Fiche 44, Frame 1.

⁶¹ See TAMSA’s Case Brief, Pub. Doc. 223, Fiche 39, Frame 36, and Rebuttal Brief, Pub. Doc. 227, Fiche 42, Frame 7. See also North Star’s Case Brief, Pub. Doc. 224, Fiche 40, Frame 1, and Rebuttal Brief, Pub. Doc. 228, Fiche 42, Frame 61.

⁶² See Pub. Doc. 224, Fiche 40, Frame 1, at Exhibit 1. In the form attached to North Star’s Case Brief, this document is entitled "BOLSA MEXICANA DE VALORES, INFORMACION FINANCIERA TRIMESTRAL, CORRESPONDIENTE AL 4to TRIMESTRE DE 1994-1994." TAMSA’s Panel Rule 57(1) Brief, at 16, refers to this document as "the unaudited 1994 financial results that TAMSA filed with the Mexican securities oversight authority (Comisión Nacional de Valores)."In its Panel Rule 57(2) Brief, at 36, the Department states that TAMSA filed this document with two Mexican agencies in March of 1995, treating the Commission and the Mexican Stock Exchange as separate entities. As background for this issue, the Panel will take the opportunity to set out the following excerpt from "Symposium—The New Latin American Debt Regime—Restructuring Strategies for Mexican Eurobond Debt," Duncan M. Darrow, et al., 16 J. Int’l L. Bus. 117 (Fall, 1995): "The Comisión Nacional Bancaria y de Valores (CNBV), the principal securities regulator in Mexico, and the Bolsa Mexicana de Valores, the Mexican stock exchange (the Bolsa), require most Mexican public companies to file annual audited financial statements (within 120 days after the end of the calendar year), quarterly unaudited financial statements (within twenty business days after the end of the first, second and third quarters and within forty-five business days after the end of the fourth quarter), and announcements regarding material corporate events and other material events which may affect the market value of the publicly traded securities they shall have issued [citing in footnote 34 the Ley del Mercado de Valores, Diario Oficial de la Federación (January 2, 1975), arts. 14(VI) and 16; Circulares 11-11, 11-11 Bis 2, 11-11 Bis 3, 11-23, 11-24 and 11- 25 issued by the CNBV].... These filings are publicly available through the Bolsa." This article notes that "Mexican companies are often late in providing the required information to the Bolsa." Id.

⁶³ Fin. Det., 60 Fed. Reg. at 33572.

⁶⁴ Id., at 33567.

⁶⁵ As reported in the Final Determination, it is the Department’s standard practice, when it finds that less than 10 percent of a company’s sales are at prices below the COP, not to disregard any below-cost sales because they were not made in substantial quantities. When it finds between 10 and 90 percent of the company’s sales are at prices below the COP, and the below-cost sales are made over an extended period of time, it disregards only the below-cost sales. When it finds that more than 90 percent of the company’s sales are at prices below the COP, and the sales were made over an extended period of time, it disregards all sales for that product and calculates FMV based on CV. Id., citing Section 773(b) of the Act. In this instance, the Department found that there were no sales to Saudi Arabia above COP; thus, it became necessary to compare United States Price ("USP") to CV to determine the dumping margin. Fin. Det., 60 Fed. Reg. at 33568-69.

⁶⁶ 19 CFR §§ 353.51(b) and 353.50.

⁶⁷ Fin. Det., 60 Fed. Reg. at 33569. See supra note 48. CV includes the COM, G&A expense (including financial expense), profit, and packing expenses. See also 19 CFR § 353.50 and Section D questionnaire, Pub. Doc. 146, Fiche 26, Frame 35, at 2-3.

⁶⁸ Fin. Det., 60 Fed. Reg. at 33575.

⁶⁹ Id., at 33568-69.

⁷⁰ TAMSA also challenges a statement made by the Department in a preliminary document regarding a claimed offset for non-operating income, an issue expressly found to be moot in the Final Determination. See supra note 8.

⁷¹ In response to Comment 6, the Department noted that "[t]he January¾June 1994 financing expense is substantially higher than the 1993 amount, in part due to the fact that the Mexican peso lost approximately nine percent of its value during the POI." Fin. Det., 60 Fed. Reg. at 33572. The suggested other causes underlying the higher 1994 financial expense rate were not identified by the Department.

⁷² See supra text accompanying notes 62-63.

⁷³The Department applied, as partial BIA, a financial expense rate that reflected the consolidated results for the first two quarters of 1994. Fin. Det., 60 Fed. Reg. at 33572.

⁷⁴ In response to Comment 6, the Department stated that use of the 1993 financial data "would reward the respondent for not fully cooperating in the investigation." Id.

⁷⁵ Id.

⁷⁶ In response to Comment 7, the Department noted that TAMSA’s normal accounting system did not allocate variances, depreciation and other fixed costs (which TAMSA termed "nonstandard" costs) to individual products. Thus, for purposes of responding to the Department’s questionnaire, TAMSA was compelled to develop a methodology to allocate such nonstandard costs to its calculation of per unit COP and CV. TAMSA did so, utilizing as a base the machine time for its finishing line process only (not all machine time). Id., at 33572-73.

⁷⁷Id., at 33573. The Department further stated that machine time was not an appropriate allocation basis for costs other than depreciation.

⁷⁸ The Department stated that total standard cost appropriately factors in machine time, labor hours, direct and indirect material cost and usage, labor cost and usage, energy cost and usage, other variable costs, maintenance, and other services. Id.

⁷⁹ Id.

⁸⁰ In response to Comment 8, the Department indicated that "it is the Department’s standard practice to calculate G&A based on the financial statements of the producing company that most closely relates to the POI...." Id.

⁸¹ Id.