IN THE MATTER OF:

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

III. STANDARD OF REVIEW

Article 1904(3) of the NAFTA requires that this Panel apply the "standard of review" and "general legal principles" ¹⁶⁵ that a U.S. court would apply in its review of a Department determination. ¹⁶⁶

The standard of review that must be applied by the Panel is dictated by § 516A(b)(1)(B) of the Act, ¹⁶⁷ which requires the Panel to "hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." ¹⁶⁸

The question on review is whether the administrative record adequately supports the Department’s determination, ¹⁶⁹ which must be adjudged only on the grounds and findings actually stated in its determination ¹⁷⁰ not on the basis of post hoc argumentation of counsel. ¹⁷¹

In carrying out its review of an agency determination, a reviewing court or binational panel must stay strictly within the confines of the administrative record already in existence. ¹⁷²

Panels may not engage in de novo review ¹⁷³ and, as a consequence, may not make new factual findings that would amend the agency record. Indeed, the statutory requirement that review be "on the [administrative] record" means that the reviewing court or binational panel is limited to "information presented to or obtained by [the Department] ... during the course of the administrative proceeding..." ¹⁷⁴

A. Substantial Evidence

The contours of the substantial evidence standard are well established in United States case law. Substantial evidence has been defined by the Supreme Court ¹⁷⁵ as "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." ¹⁷⁶

In a later case the Supreme Court elaborated on this standard, stating that substantial evidence can be "something less than the weight of the evidence." ¹⁷⁷ In assessing the substantiality of the evidence, the Panel must consider "the record in its entirety," including "the body of evidence opposed to the [agency’s] view." ¹⁷⁸

As noted by the binational panel in New Steel Rails from Canada, the Panel’s role is "not to merely look for the existence of an individual bit of data that agrees with a factual conclusion and end its analysis at that." ¹⁷⁹

Rather, the Panel must also take into account evidence that detracts from the weight of the evidence relied on by the agency in reaching its conclusions. ¹⁸⁰ The Panel is, however, conscious of its obligation under the substantial evidence standard not to reweigh the evidence, or substitute its judgment for that of the Department. ¹⁸¹

It is well settled that "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence." ¹⁸²

The reviewing authority therefore may not "displace the [agency’s] choice between two fairly conflicting views, even though [it] would justifiably have made a different choice had the matter been before it de novo." ¹⁸³

As the Supreme Court has noted, the substantial evidence standard effectively "frees the reviewing [authority] of the time-consuming and difficult task of weighing the evidence, it gives proper respect to the expertise of the administrative tribunal and it helps promote the uniform application of the statute." ¹⁸⁴

B. Deference

The substantial evidence standard generally is seen to require the reviewing authority to accord deference to an agency’s factual findings, its statutory interpretations, and the methodologies selected and applied by the agency. With respect to fact-finding, prior binational panels have noted that "deference must be accorded to the findings of the agency charged with making factual determinations under its statutory authority." ¹⁸⁵  Judicial decisions are clearly in accord with this view. ¹⁸⁶

On issues of statutory interpretation, "deference to reasonable interpretations by an agency of a statute that it administers is a dominant, well-settled principle of federal law." ¹⁸⁷

The Supreme Court has stated that "when a court is reviewing an agency decision based on a statutory interpretation, ‘if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statue." ¹⁸⁸

A reviewing authority need not conclude that "[t]he agency’s interpretation [is] the only reasonable construction or the one the [reviewing authority] would adopt had the question initially arisen in a judicial proceeding." ¹⁸⁹

Moreover, the U.S. Court of Appeals for the Federal Circuit has emphasized that "[d]eference to an agency’s statutory interpretation is at its peak in the case of a court’s review of Commerce’s interpretation of the antidumping laws." ¹⁹⁰

It is also clear that deference must be given to the methodologies selected and applied by the agency to carry out its statutory mandate, ¹⁹¹ which a court or panel may only review for reasonableless. ¹⁹²

Deference to the Department’s interpretation and implementation of the antidumping laws can be seen to be grounded in express congressional intent. The United States Congress has stressed that in the antidumping field, it has "entrusted the decision making authority in a specialized, complex economic situation to administrative agencies." ¹⁹³

As a result, reviewing courts have acknowledged that "the enforcement of the antidumping law [is] a difficult and supremely delicate endeavor. The Secretary of Commerce . . . has broad discretion in executing the law." ¹⁹⁴

C. Limitations On Deference

Although review under the substantial evidence standard is, by Congressional intent and by law, limited, application of that standard clearly does not result in an abdication of the Panel’s authority to conduct a meaningful review of the Department’s determination. ¹⁹⁵

Indeed, a contrary conclusion would eviscerate the function of the reviewing authority, rendering the appeal process superfluous. The deference to be accorded an agency’s findings and conclusions therefore is not unbounded. ¹⁹⁶

It is well established, for example, that an agency’s determination must have a reasoned basis. ¹⁹⁷ The reviewing authority may not defer to an agency determination premised on inadequate analysis or reasoning. ¹⁹⁸

The extent of deference to be accorded depends on "the thoroughness evident in [the agency’s] consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements...." ¹⁹⁹

Furthermore, a rational connection must be present between the facts found and the choice made by the agency. ²⁰⁰ Although room exists to uphold an agency’s decision of less than ideal statutory provisions."). See also Smith-Corona Group, 713 F.2d at 1571 ("The Secretary cannot, under the mantle of discretion, violate these standards or interpret them out of existence.").

clarity if its path of reasoning may reasonably be discerned, ²⁰¹ there must nevertheless be an adequate explanation of the bases for the agency’s decision in order for the reviewing authority to meaningfully assess whether it is supported by substantial evidence on the record. The Department, therefore, must articulate and explain the reasons for its conclusions. ²⁰²

Deference to an agency’s interpretation of the statute it is charged with implementing also is not unlimited. A reviewing authority may not, for instance, permit an agency "under the guise of lawful discretion or interpretation to contravene or ignore the intent of Congress." ²⁰³

The Supreme Court itself has held that "no deference is due to agency interpretations at odds with the plain language of the statute itself. Even contemporaneous and longstanding agency interpretations must fall to the extent they conflict with statutory language." ²⁰⁴

Moreover, the Department’s efforts at statutory interpretation must, when appropriate, take into account the international obligations of the United States. ²⁰⁵

Even the methodology selected and applied by the agency to carry out its statutory mandate "still must be lawful, which is for the courts finally to determine." ²⁰⁶

Finally, although there is a presumption of good faith and conscientious exercise of the Department’s responsibilities in an investigation. ²⁰⁷ the Department has a legal obligation to observe the basic principles of due process and fundamental procedural fairness ²⁰⁸ and to justify any departures it makes from settled practice with reasonable explanations that are themselves supported by substantial evidence on the record. ²⁰⁹

The standard of review and established principles articulated above and elaborated on throughout have been thoroughly considered and applied by the Panel in rendering its opinion. ²¹⁰

IV. SUMMARY OF PANEL DECISION

A. Calculation of Financial Expense

The Panel upholds the Department’s calculation of TAMSA’s financial expense on the basis of BIA and on the alternative basis that the 1993 financial data was not representative of the financial expenses incurred during the POI.

B. Calculation of General and Administrative Expense

The Panel remands the Final Determination to the Department for a detailed explanation as to the reasons for its rejection of the 1993 financial data as non-representative of the G&A expenses incurred during the POI.

C. Allocation Methodology for Nonstandard Cost

The Panel upholds the Department’s rejection of TAMSA’s nonstandard cost allocation method and its substitution of an allocation method based on standard costs. The Panel also grants the Department’s request for a remand to re-calculate the nonstandard cost allocation for a particular subset of TAMSA’s sales.

D. Offset for Non-Operating Income

The Panel determines that the challenge by TAMSA to the Final Determination, based on a statement made by the Department in the Team Concurrence Memorandum, is not ripe for consideration.

exceed its jurisdiction. Live Swine from Canada, ECC-93-1904-01USA, at 11 (April 8, 1993) (citing Fresh, Chilled, and Frozen Pork from Canada, ECC 91-1904-01USA, at 21 (June 14, 1991).

V. DISCUSSION

A. Calculation of Financial Expense

1. Arguments of the Participants

TAMSA

TAMSA sets out a number of challenges to the Department’s decision to reject TAMSA’s financial expense calculation based upon its 1993 full-year audited data and to utilize, as partial BIA, TAMSA’s 1994 half-year unaudited data. Specifically, TAMSA argues that the Department:

Disregarded its established standards of practice for using only financial expense data based on:

(a) annual (b) audited financial statements, (c) which it verified;

Rejected TAMSA’s 1993 expense data even though it was the only available data that was verified, from annual, audited financial statements;

Disregarded its established standards for imposing BIA and opted to punish TAMSA for "withholding" a document the Department never actually requested even though TAMSA had cooperated with all of the Department’s requests, and had provided the data in question in other submissions;

Used as punitive BIA 1994 data that was: (a) distortive, (b) unaudited, (c) for only a half year, and (d) which the Department chose not to verify. ²¹¹

As noted previously, the Department made this particular decision for two independent reasons: first, the withholding of the Mexican Stock Exchange filing warranted the application of the 1994 half-year data as partial BIA; and second, the half-year 1994 data was more current and thus more "representative" of POI expenses. ²¹²

TAMSA’s argument to the Panel on the financial expense issue focuses on three major points: (1) the Department’s "established practice and policy" requires the Department to base its financial expense calculation on TAMSA’s audited 1993 financial statement; (2) TAMSA "fully cooperated" with the Department and thus there was no justification for the latter to impose BIA; and (3) the Department’s "assertion" that the 1994 half-year data was more appropriate than the audited, full-year 1993 data was unjustified.

TAMSA highlights the first argument by noting that "it is the Department’s well established practice to develop the financial expense information based on the full-year audited financial statement that most closely corresponds to the [POI]." ²¹³

Moreover, TAMSA states that it is "[t]he Department’s general policy ... to utilize audited financial statements that are completed no later than the time of verification." ²¹⁴

Finally, TAMSA states that it is "the Department’s longstanding policy ... to use a one-year period for calculating administrative and financial expenses." ²¹⁵

TAMSA supports its recapitulation of the Department’s practice primarily on the basis of two decisions rendered at about the same time as the instant case: Furfuryl Alcohol from Thailand. ²¹⁶ ("Furfuryl Alcohol") and Canned Pineapple Fruit from Thailand. ²¹⁷ ("Canned Pineapple").

As perceived by TAMSA, the Furfuryl Alcohol case involved a decision by the Department to base financial expense on the Thai respondent’s audited 1993 financial statement, even though at verification it obtained and verified the unaudited 1994 full-year and half-year data. Similarly, the Canned Pineapple case involved a decision wherein the Thai respondents had requested that the department use the unaudited, but complete and verified, 1994 financial statements submitted by the time of the verification. In addition, respondents’ audited 1994 financial statements were submitted after verification but before the hearing. In the final determination, however, the Department elected to use the audited 1993 data.

TAMSA states that the Furfuryl Alcohol and Canned Pineapple cases "exemplify the Departments [sic] standard practice of strict adherence to its policy of using only data from audited financial statements," ²¹⁸ and notes that the instant case, when compared to those cases, evinces "a troubling and irrational inconsistency...." ²¹⁹

TAMSA’s second argument is primarily a factual one, asserting that the Department’s finding that TAMSA was uncooperative was "premised on three key errors...." ²²⁰

The first of these was the Department’s characterization in the Team Concurrence Memorandum that the 1994 financial results TAMSA provided to the Department at the Houston cost verification was merely a "press release," ²²¹ which diminished the fact that this material "constituted the official results that TAMSA would soon file with the SEC as required by U.S. law." ²²²

Second was the Department’s statement that TAMSA "withheld" the Mexican Stock Exchange filing. ²²³

Third was the Department’s assertion that the withholding of that filing prevented the Department from effectively verifying and analyzing the 1994 financial expense. ²²⁴

Based on these three "key errors," TAMSA asserts that the Department erroneously concluded that TAMSA was not cooperating in the investigation.

TAMSA’s third argument against the use of the 1994 half-year data was that such data was itself distortive ("the devaluation effects in the first six months of 1994, while not as enormous as those at the end of the year, nevertheless were substantial, aberrational and distortive"). ²²⁵

Relatedly, TAMSA expresses concern that "[t]he Department never indicated it would base the financial and G&A expenses on data for the first six months of 1994 until the final determination, when it was too late for TAMSA to address the point." ²²⁶

The Department

The Department responds to TAMSA’s challenges by noting that an agency is not rigidly bound by its prior practice and that "an agency has the authority to depart from prior practice, either as a matter of ongoing policy or to accommodate the unusual circumstances of a particular case, as long as the agency provides a reasonable explanation for its departure from past practice." ²²⁷

Specifically, the Department states that "[t]he use of data from the most recent year for which audited statements are available is predicated on the assumption that such data are representative of data for the POI." ²²⁸

In this instance, the Department reasonably determined that TAMSA’s 1993 financial expense data were not representative of POI expenses ²²⁹ which called for a departure from the Department’s usual practice as represented by the outcomes of Furfuryl Alcohol and Canned Pineapple. ²³⁰

Given the "extreme differences," the Department "made an explicit decision to depart from its general practice of using audited annual statements as the basis for financial expense calculations in order to utilize more representative data." ²³¹

In doing so, the Department recognized the tension between the desirability of using audited statements and "requirement" of using data that is not representative of the POI. ²³²

Aside from the question of whether the data was representative, the Department also states that TAMSA’s "lack of cooperation" was an independent factor in the use of the 1994 data and the related decision to deny adjustments to that data. The Department summarizes the point by stating that "TAMSA, despite early cooperation in providing necessary data, improperly withheld the fourth quarter 1994 consolidated financial statement it filed with Mexican securities authorities and the Mexican Stock Exchange, thereby assuring that the Department would not be able to verify that statement." ²³³

In its Panel Rule 57(2) Brief, the Department reviewed the facts related to what it characterized as its numerous "ongoing" and "standing" requests for year-end 1994 financial statements, and states that TAMSA’s claims that it had complied with all of the Department’s specific requests and that the Department failed to ask for the Mexican Stock Exchange filing lack credibility. ²³⁴

The Department argues that during the Houston verifications (April 10-12, 1995 for sales; April 18-20, 1995 for cost), it "again requested the long-awaited audited consolidated financial statement as well as the unaudited version of that statement that was to have been filed with U.S. and Mexican securities authorities in March," ²³⁵ for which it received the answers that "audited financial statements were not available" and that "no financial statement was filed with the securities oversight agencies." ²³⁶

The Department then discusses and dismisses as meritless the three "key errors" put forward by TAMSA. Having discussed the factual basis for its determination that TAMSA was, in law, "uncooperative," the Department then sets out at length its argument that the BIA statute requires the Department to use BIA for the financial expense data, and that the Department has great discretion in selecting BIA. The Department is not, for example, limited to verified data in its choice of BIA and it need not select, as BIA, the most adverse data on the record, although the BIA selected must be "reasonably adverse." In this instance, the Department argues that it was reasonable for it to reject full-year 1994 financial expense data, since the full-year data (including the December 1994 devaluation) greatly overstated financial expense during the POI, and to select the 1994 half-year data as "reasonably adverse." ²³⁷

The Department also explained its specific choice among the pool of five BIA options available. ²³⁸

North Star

North Star was also a complainant with respect to the Final Determination, and its Panel Rule 57(1) Brief focused on the Department’s failure to apply the most adverse BIA possible for calculation of the BIA. North Star argues that the Department applies a two-tier methodology for both "total BIA" and for "partial BIA," and that even though the present situation involved partial BIA, TAMSA’s withholding of the Mexican Stock Exchange filing was of sufficient seriousness that it should have resulted in the Department’s applying the most adverse margin possible. ²³⁹

North Star’s Panel Rule 57(2) Brief generally supports the positions taken by the Department in its own response brief. However, North Star emphasizes that "the Panel must reject any arguments based on factual allegations that are outside the administrative record of the underlying proceeding."... ²⁴⁰

Noting that TAMSA had argued that: (i) the Department never actually requested the 1994 financial statement filed in Mexico; (ii) the relevant 1994 data was already on the record in the form of the press release submitted at the Houston cost verification; and (iii) the Department was incapable of verifying the information contained in the Mexican filing at TAMSA’s U.S. facility, North Star urges that these "facts" are nowhere to be found in the record and are instead mere argument of counsel. ²⁴¹

Indeed, North Star emphasizes that the Department’s Cost Verification Report constitutes "the official record of the Mexican and U.S. verification proceedings," ²⁴² which report clearly evidences both the request for the 1994 financial data and TAMSA’s denial that such data had been filed with the "securities oversight agencies. ²⁴³

In response to TAMSA’s remaining points, North Star argues that the Houston press release cannot be considered a surrogate for the Mexican Stock Exchange filing since it was "not an authoritative and detailed financial statement upon which the Department could rely for the purpose of financial expense." ²⁴⁴

Finally, North Star argues that U.S. law does not permit a respondent to "pick and choose" what data to provide to the Department ²⁴⁵ and that it was not TAMSA’s prerogative to withhold the Mexican Stock Exchange filing because it believed that verification was impractical. ²⁴⁶

Continue on to Subsection 2: Discussion and Decision of the Panel

¹⁶⁵ These principles include "standing, due process, rules of statutory construction, mootness and exhaustion of administrative remedies." NAFTA Art. 1911.

¹⁶⁶ Under the NAFTA, an Article 1904 Binational Panel Review of a less-than-fair value determination in a U.S. antidumping duty action must be conducted in accordance with U.S. law. NAFTA Art. 1902(1).

¹⁶⁷ 19 U.S.C. § 1516a(b)(1)(B); see NAFTA Annex 1911.

¹⁶⁸For purposes of Panel review, the "law" consists of "relevant statutes, legislative history, regulations, administrative practice and judicial precedents to the extent that a court of the importing Party would rely on such materials...." NAFTA Art. 1904(2). The "substantial evidence" standard mandated by the NAFTA is statutorily linked to that evidence which is "on the record," and Article 1904(2) of the NAFTA expressly limits the Panel’s review to the "administrative record" filed by the Department.

¹⁶⁹ Daewoo Electronics Company v. International Union, 6 F.3d 1511, 1520 (Fed. Cir. 1993), cert. denied, 114 S. Ct. 2672 (1994).

¹⁷⁰Hussey Copper, Ltd. v. United States, 834 F. Supp. 413, 427 (Ct. Int’l Trade 1993), citing SEC v. Chenery, 318 U.S. 80, 87 (1943).

¹⁷¹ Maine Potato Council v. United States, 613 F. Supp. 1237, 1245 (Ct. Int’l Trade 1985) ("Counsel’s post hoc rationalization cannot substitute for a clear statement by the [agency] as to how it treated [a significant competitive factor].").

¹⁷² See Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985) ("[T]he focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court.... The task of the reviewing court is to apply the appropriate [ ] standard of review [ ] to the agency decision based on the record the agency presents to the reviewing court.") (citations omitted).

¹⁷³ Ceramica Regiomontana, S.A. v. United States, 636 F. Supp. 961, 965 (Ct. Int’l Trade 1986), aff’d per curiam, 810 F.2d 1137 (Fed. Cir. 1987).

¹⁷⁴ 19 U.S.C. § 1516a(b)(2)(A)(i).

¹⁷⁵ The Panel recognizes that decisions of the Supreme Court and the U.S. court of Appeals for the Federal Circuit are binding on Article 1904 binational panels. NAFTA Article 1904(2)-(3). In contrast, decisions of the U.S. Court of International Trade do not constitute binding precedent. See Rhone Poulenc v. United States, 583 F. Supp. 607, 612 (Ct. Int’l Trade 1984) (A decision of the Court of International Trade is "valuable, though non-binding, precedent unless and until it is reversed."). Likewise, a decision of one Article 1904 binational panel is not binding on future panels. See Certain Corrosion-Resistant Carbon Steel Products from Canada, USA-93-1904-03, at 78 note 254 (October 31, 1994).

¹⁷⁶ Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)); see also Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984).

¹⁷⁷ Consolo v. Federal Maritime Commission, 383 U.S. 607, 620 (1966).

¹⁷⁸ Universal Camera, 340 U.S. at 488.

¹⁷⁹ New Steel Rails from Canada, USA-89-1904-09, at 9 (Aug. 13, 1990).

¹⁸⁰ See Universal Camera, 340 U.S. at 477, 488; Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984); see also Suramerica de Aleaciones Laminadas, C.A. v. United States, 818 F. Supp. 348, 353 (Ct. Int’l Trade 1993) ("In other words, it is not enough that the evidence supporting the agency decision is ‘substantial’ when considered by itself.").

¹⁸¹Fresh, Chilled and Frozen Pork from Canada, USA-89-1904-11, at 8 (Aug. 24, 1990); see also Metallverken Nederland B.V. v. United States, 728 F. Supp. 730, 734 (Ct. Int’l Trade 1989).

¹⁸² Consolo, 383 U.S. at 620.

¹⁸³Universal Camera, 340 U.S. at 488; accord American Spring Wire Corp. v. United States, 590 F. Supp. 1273, 1276 (Ct. Int’l Trade 1984), aff’d sub nom., Armco, Inc. v. United States, 760 F.2d 249 (Fed. Cir. 1985).

¹⁸⁴Consolo, 383 U.S. at 620.

¹⁸⁵Fresh, Chilled and Frozen Pork from Canada, USA-89-1904-11, at 6 (citing Red Raspberries from Canada, USA-89-1904-01, at 18-19 (Dec. 15, 1989).

¹⁸⁶ See also N.A.R., S.p.A. v. United States, 741 F. Supp. 936, 939 (Ct. Int’l Trade 1990) ("[D]eference is given to the expertise of the administration agency regarding factual findings.").

¹⁸⁷National R.R. Passenger Corp. v. Boston & Maine Corp., 503 U.S. 407, 417 (1992).

¹⁸⁸Id., quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 (1984). Despite the ostensible clarity of the Supreme Court’s pronouncement in Chevron, the case has engendered a great deal of academic and judicial doubt and debate. See, e.g., Thomas W. Merrill, Judicial Deference to Executive Precedent, 101 Yale L. J. 969, 978 (1992), and Federal Mogul Corp. v. United States, 63 F.3d 1572, 1579 (Fed. Cir. 1995).

¹⁸⁹ American Lamb Co. v. United States, 785 F.2d 994, 1001 (Fed. Cir. 1986), citing Chevron, 467 U.S. at 843 note 11.

¹⁹⁰ Koyo Seiko v. United States, 36 F.3d 1565, 1570 (Fed. Cir. 1994), citing Daewoo Electronics, 6 F.3d at 1516.

¹⁹¹ See Brother Industries, Ltd. v. United States, 771 F. Supp. 374, 381 (Ct. Int’l Trade 1991) ("Methodology is the means by which an agency carries out its statutory mandate and, as such, is generally regarded as within its discretion.").

¹⁹² Koyo Seiko Co. v. United States, 66 F.3d 1204, 1210-11 (Fed. Cir. 1995) ("[O]ur inquiry is limited to determining whether Commerce’s model-match methodology ... is reasonable.")

¹⁹³ S. Rep. No. 249, 96^th Cong., 1^st Sess. 252 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 638.

¹⁹⁴ Smith-Corona Group v. United States, 713 F.2d 1568, 1571 (Fed. Cir. 1983), cert. denied, 465 U.S. 1022 (1984); see also Consumer Prod. Div., SCM Corp. v. Silver Reed America, 753 F.2d 1033, 1039 (Fed. Cir. 1985).

¹⁹⁵ See Al Tech Specialty Steel Corp. v. United States, 651 F. Supp. 1421, 1424 (Ct. Int’l Trade 1986) ("This deference, however, should in no way be construed as a rubber stamp for the government’s interpretation of

¹⁹⁶ See Softwood Lumber from Canada (Injury), USA-92-1904-02, at 15 (July 26, 1993).

¹⁹⁷ American Lamb Co., 785 F.2d at 1004 (citing S. Rep. No. 249, 96^th Cong., 1^st Sess. 252 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 638); see also Fresh, Chilled and Frozen Pork, USA 89-1904-11, at 13 (Aug. 24, 1990).

¹⁹⁸ Chr. Bjelland Seafoods A/C v. United States, 14 ITRD 2257, 2260, 1992 Ct. Int’l Trade LEXIS 213 (Ct. Int’l Trade 1992); USX Corp. v. United States, 655 F. Supp. 487, 492 (Ct. Int’l Trade 1987).

¹⁹⁹ Ceramica Regiomontana, S.A., 636 F. Supp. at 965 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)), aff’d, 810 F.2d 1137 (Fed. Cir. 1987).

²⁰⁰ Bando Chem. Indus. v. United States, 787 F. Supp. 224, 227 (Ct. Int’l Trade 1992) (citing Bowman Transportation v. Arkansas-Best Freight System, 419 U.S. 281, 285 (1974), and Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)); Avesta AB v. United States, 724 F. Supp. 974, 978 (Ct. Int’l Trade 1989), aff’d, 914 F.2d 233 (Fed. Cir. 1990), cert. denied, 111 S. Ct. 1308 (1991).

²⁰¹ Ceramica Regiomontana, S.A., 810 F.2d 1137, 1139 (Fed. Cir. 1987) (citing Bowman Transportation, 419 U.S. at 286).

²⁰² See, e.g., Mitsubishi Materials Corp. v. United States, 820 F. Supp. 608, 621 (Ct. Int’l Trade 1993); USX Corp., 655 F. Supp. at 490; SCM Corp. v. United States, 487 F. Supp. 96, 108 (Cust. Ct. 1980); Maine Potato Council, 613 F. Supp. at 1244-45; Bando Chem. Indus. 787 F. Supp. at 227.

²⁰³Cabot Corp. v. United States, 694 F. Supp. 949, 953 (Ct. Int’l Trade 1988).

²⁰⁴ Public Employees Retirement System of Ohio v. June M. Betts, 492 U.S. 158, 171 (1989).

²⁰⁵ See Alexander Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118, 2 L.Ed. 208 (1804); Weinberger v. Rossi, 456 U.S. 25, 32 (1982); Federal-Mogul Corp., 63 F.3d at 1581-82; Section 114, Restatement (Third) of the Foreign Relations Law of the United States.

²⁰⁶ Brother Industries, 771 F. Supp. at 381. See also Gifford-Hill Cement Co. v. United States, 615 F. Supp. 577, 582 (Ct. Int’l Trade 1985) ("If the use of [a submarket] analysis was improper, then the Commission’s findings would not be supported by substantial evidence.").

²⁰⁷ Saha Thai Steel Pipe Co. v. United States, 661 F. Supp. 1198, 1202 (Ct. Int’l Trade 1987); Librach v. United States, 147 Ct. Cl. 605, 612 (1959). See also Takashima U.S.A., Inc. v. United States, 886 F. Supp. 858, 861 (1995) ("A presumption of regularity attaches to the actions and conduct of government officials in the performance of their lawfully executed duties.") (citing Alaska Airlines, Inc. v. Johnson, 8 F.3d 791, 795 (Fed. Cir. 1993).

²⁰⁸ See Sigma Corp. v. United States, 841 F. Supp. 1255, 1267-68 (Ct. Int’l Trade 1993); Usinor Sacilor v. United States, 893 F. Supp. 1112, 1141 (Ct. Int’l Trade 1995); and Creswell Trading Co. v. United States, 15 F.3d 1054, 1062 (Fed. Cir. 1994).

²⁰⁹ See Western Conference of Teamsters v. Brock, 709 F. Supp. 1159, 1169 (Ct. Int’l Trade 1989); see also National Knitwear and Sportswear Ass’n v. United States, 779 F. Supp. 1364, 1369 (Ct. Int’l Trade 1991).

²¹⁰ Extraordinary Challenge Committees ("ECC") formed pursuant to NAFTA Art. 1904(13) have also addressed the issue of standard of review. The second ECC emphasized that binational panels must not only accurately articulate the standard of review, but must conscientiously apply the appropriate standard of review so as not to

²¹¹TAMSA Panel Rule 57(1) Brief, at 10.

²¹² See supra note 71 and accompanying text.

²¹³ TAMSA Panel Rule 57(1) Brief, at 18 (emphasis in original), citing Shop Towels from Bangladesh, 60 Fed. Reg. 48966, 48967 (September 21, 1995), and Furfuryl Alcohol from Thailand, 60 Fed. Reg. 22557, 22561 (May 8, 1995).

²¹⁴ TAMSA Panel Rule 57(1) Brief, at 19. Arguing that there must be some "cut-off" point for the use of new data, TAMSA states that "the Department normally employs verification as that point because it is the last meaningful time the Department and the responding companies can analyze and verify the data, as well as potentially important adjustments thereto." Id.

²¹⁵ Id., at 20.

²¹⁶ 60 Fed. Reg. 22557 (May 8, 1995).

²¹⁷ 60 Fed. Reg. 29553 (June 5, 1995).

²¹⁸ TAMSA Panel Rule 57(1) Brief, at 24.

²¹⁹ Id., at 25.

²²⁰ Id., at 26.

²²¹ See Team Concurrence Memorandum, Pub. Doc. 251, Fiche 46, Frame 51, at 11.

²²² TAMSA Panel Rule 57(1) Brief, at 27. TAMSA argues that this material, which admittedly contained a press release, "included TAMSA’s key financial results, the 1994 balance sheet and the income statement," similar to TAMSA’s later 6K SEC filing for 1994. Id.

²²³ TAMSA asserts that it had offered at the Veracruz cost verification to provide the Department with the unaudited financial results once they were filed with the U.S. and Mexican securities authorities, but that the Department declined this offer, stating that it would seek to collect the 1994 results at the U.S. verification. At the further manufacturing cost verification, however, TAMSA asserts that the Department requested only the 1994 audited financial statement and the financial statement filed with the SEC. TAMSA states that the Department never requested the Mexican Stock Exchange filing. See supra note 115.

²²⁴ TAMSA asserts that "it would have been impossible for the Department to verify the 1994 financial expense at TAMSA’s minimal subsidiary, TIC." Id., at 30. The only practical time the Department could have done so was at the Mexican verification, which took place before the filing of the document in question. Id.

²²⁵ Id., at 35. TAMSA noted that the significant devaluation of the peso during the POI caused, at least in part, a one thousand percent increase in financial expenses during the POI versus the same period of the previous year. Id.

²²⁶ Id., at 36-37.

²²⁷ Department Panel Rule 57(2) Brief, at 23-24, citing National Knitwear, 779 F. Supp. at 1369, 1374; Citrosuco Paulista, S.A. v. United States, 704 F. Supp. 1075, 1088 (Ct. Int’l Trade 1988); and Krupp Stahl A.G. v. United States, 822 F. Supp. 789, 795 (Ct. Int’l Trade 1993).

²²⁸ Department Panel Rule 57(2) Brief, at 25. ("Commerce’s purpose is not to obtain data that are valid only for the fiscal year covered by a given audited statement, but trustworthy data that are representative of costs during the POI. Data, however trustworthy, are useless if they are not representative of POI costs.") Id., at 26.

²²⁹ The Department notes that the interest expense calculated based on the audited 1993 financial statements was "a mere 2.9%." In contrast, interest expense for the POI was 37%, "nearly thirteen times the 1993 annualized rate." Id., at 28.

²³⁰ For a statement of the general rule, the Department also cites Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands, 58 Fed. Reg. 37199, 37204 (July 9, 1993) (Comment 11) ("We calculate G&A expenses based on the audited annual financial statements which most closely correspond to the POI.... If such statements are not available, the Department has relied on financial statements from the fiscal year prior to the POI, when such statements provide a reasonable approximation of the company’s current financial position."). Department Panel Rule 57(2) Brief, at 26-27 (emphasis omitted). The Department in fact reads Furfuryl Alcohol and Canned Pineapple as supporting this general principle. Id., at 32.

²³¹Department Panel Rule 57(2) Brief, at 28. See also id., at 34 ("TAMSA’s 1993 audited data was not a reasonable surrogate for data from 1994, when TAMSA’s financial expenses soared as a result of the ever-weakening peso.")

²³² Id., at 35 ("When firms do prepare audited statements, but they are not available for the period most closely related to the POI, the Department must weigh the importance of using audited data against the requirement that the data be representative of the POI.")

²³³ Id., at 36.

²³⁴ Id., at 36-37.

²³⁵ Id., at 38.

²³⁶ See Cost Verification Report, Pub. Doc. 220, Fiche 39, Frame 1, at 9-10; see also supra notes 112, 113, and 115.

²³⁷ Department Panel Rule 57(2) Brief, at 46 et seq.

²³⁸ Id., at 60-62.

²³⁹North Star Panel Rule 57(1) Brief, at 11-19.

²⁴⁰ North Star Panel Rule 57(2) Brief, at 7.

²⁴¹ Id., at 16.

²⁴² Id., at 18.

²⁴³ North Star states that "[t]he Department’s verification report, team concurrence memorandum, and final determination all provide overwhelming support for the Department’s findings that TAMSA was requested to furnish 1994 financials, but did not; and that TAMSA told the Department’s verifiers that the 1994 financials were not filed with the securities oversight agencies, when in fact they had been." Id., at 19.

²⁴⁴ Id., at 23.

²⁴⁵ Id., at 24, citing Persico Pizzamiglio, S.A. v. United States, 16 ITRD 1465, 1468 (Ct. Int’l Trade 1994); N.A.R., S.p.A., 741 F. Supp. at 941-42; and Brother Industries, 771 F. Supp. at 383.

²⁴⁶ North Star Panel Rule 57(2) Brief, at 24.