International Trade Law News

Published by Jacobson Burton Kelley PLLC

Senior Judge Tsoucalas of the U.S. Court of International Trade (CIT) today issued an opinion that conclusively resolves a major issue involving the duty drawback adjustment used in many U.S. antidumping cases. In Allied Tube & Conduit and Wheatland Tube v. United States, Slip Op. 05-56 (May 12, 2005), the U.S. standard pipe industry appealed the U.S. Department of Commerce's (DOC) decision to grant a duty drawback adjustment in calculating the Borusan Group's (Borusan), dumping margin in the 2002-2003 antidumping review on standard pipe from Turkey. Borusan is Turkey's leading producer and exporter of steel pipe and tube products.

In its brief submitted to the CIT, DOC contended that it properly applied its standard two-prong test for granting a duty drawback adjustment and properly determined that Borusan satisfied the requirements of the test. DOC also stated that it verified that Borusan paid duties upon inputs used in the production of merchandise sold domestically. Borusan's brief noted that there is no additional requirement in U.S. law that a respondent must show that it paid duties on other imported raw materials or that its home market price was based on a duty-inclusive cost. In any event, Borusan stated that it had provided evidence during the sales verification that it paid import duties on imported raw materials.

In an opinion issued only 15 days after the oral argument, Judge Tsoucalas found that that the statute is clear on its face and neither U.S. law, CIT precedent or DOC's practice required Borusan to prove that it paid import duties on inputs used in the home market. Moreover, Judge Tsoucalas held that DOC's determination that Borusan satisfied both prongs of its standard two-prong test for duty drawback adjustments was supported by substantial evidence and in accordance with law. As a result, the court denied Allied Tube’'s claims in all respects and found that DOC properly granted Borusan's duty drawback adjustment.