well supply company versus united states and a number of other companies u s steel maverick boomerang to two thousand and seventeen forty nine to ninety five fifteen zero four we're going to have three five minute arguments right that's correct your honor what one of them will be robot that's correct and you are assert questions about certain things and what i want to know about and i don't know if it's you or one of the others is what's the point of six hundred seventy seven and if we have the substantial transformation that might be the most of a question can provide another answer if you can and then while the clock is ticking use your time however you see that this is a been a problem for decades in these trade cases when the private parties divide up time like this so here's my question this  stansell transformation test you think commerce appropriately used here how does that relate to the circumvention test why would we ever need circumvention if we have a substantial transformation test well your honor we believe that the circumventi test is for the more narrow purpose of explicitly expanding the scope of an anti dumping countervailing duty can you give me an example of how that might happen and and these kind of factual circumstances so for instance  legislative history with respect to the u r e in the statement of administrative action expressly recognized that the true test exists and they exist to answer different questions in congress this explicitly stated outside of a situation involving circumvention of an convert that unfinished mc if you into drill pipe the circumvention analysis of the situation would be appropriate so we commerce can make a finding that even though the pipe is no longer explicitly covered by the order because finished and unfinished to correct and so the question for the commerce which congress correctly identified in its original germination ones what is the country of origin of or we get into all that just to understand the interplay between sixty and seventy seven and a substantial transformation ok you've identified an example where six hundred seventy seven can capture something that the substantial transformation test cannot is it fair to say though that everything that the substantial transformation test can sweep in is fully encompassed by six hundred seventy seven not necessarily wrong or in pure bearing for example in a different case where the court looked that whether merchandise that left the subject country that was assembled in another country that was completed the court looked at the substantial transformation test there found that it wasn't satisfied and then said it could then look at a circumvention analysis it recognized the very situation we have here but if you reach the conclusion or the determination that it's not been substantially transformed you don't get to the circumvention test because it's never left the order t circumvention analysis as the court preparing noted it's an additional test to determine whether i need to expand the order to bring that product in i guess what i'm wondering is is the is it redundant the have the substantial transformation  anymore because whatever that could be captured using that practice would inevitably be captured in six hundred seventy seven million run i don't think so and congress didn't indicate that it thought it was redundant either or again in the legislative you think of an example kind of like the example you gave to judge hughes about how six hundred seventy seven is broader than substantial transformation so i think in a different example if you had a product that was subject merchandise that left  subject country went to another country and was assembled into something else that's not part of the class or kind is a possibility even in this situation if commerce looked at the unfinished tube and it went some place else it may be substantially transformed but it's also possible it could be included in circumvention i'm not aware of an example that may exist but clearly congress thought that there wasn't a conflict and that there are two separate  orders i think partly in response to try to satisfy that the trade court but it seems like it's first screw up ruling said these are finished tubes entering the united states which is indisputable e correct ri tubes coming from indonesia are finished finished tubes that we're looking at the things coming into the united states that are subject to the orders are finished stripped and the order covers finish matter which rochelle we rely on actually just to clarify your honor so in the original determination at page nine and i can give you the j site when i have the original determination in front of me commerce says and agree with the other one does it make any difference to which rationale we are and was suitable to a poll converses position does it have any impact on the case i would say the rationale can support including either determination would support including it i would say though that the lower court was incorrect in taking the substantial transformation test away from the department and we argued both in the alternative in our brief but frankly the more proper interpretation is honor thomas is exercised its discretion to not be here why do you think that is frankly i do not know your honor why not here today i do know that it doesn't change the underlying record which we believe clearly shows that commerce was denied there's there's some kind of substantial transformation language that's now written and you know your idea of we believe that this case has caused a possible practice change of commerce by writing workers differently so we but that's gone and so what and so we're well i would think reviewing the ultimate sin well the second decision if i may draw your attention to that your honor your honour's unlike the preceding i mean it's not if you mean the final commerce decision after the multiple re man's when they just give up and switch their position if they just don't include that in their protests that's that's correct but that does finnish to probe china but do they need discretion to do that is the discretion to allow them to use the substantial transformation yes that is part of the discretion discretion is also looking at the unambiguous language which you just cited your honor finding that finished an unfinished tubes or both cited in the order and then concluding we believe logically that if a set such as unfinished o c d g from the people's republic of china is listed in the order then a subset which would be unfinished o c t g that a subsequently finished in the third country could also logically be read into that order me therefore believe that commerce was reasonable in the interpretation and in its initial scope ruling because it both was specific it followed this court's instructions from fed meant resources can supply defer cohen other cases are looking at the plain language of the orders and in a plain language as you pointed out it came across on ambiguous judge kelly did some very thorough rolling the opinions concluding that this language was just ambiguous and decided that because it was every big u s disc it wasn't necessarily included in the scope and so they're for has held in in can supply commerce is granted substantial deference when it comes to the interpretation of the scope of its own orders and i quote the meaning and scope of an anti dumping orders or issues particularly within the expertise  and unfinished goods from china and so we have to determine in the instance of these particular items that are coming across the border if they're from china and isn't the substantial transformation of the tests that commerce routinely uses not just in scope rulings but in everything to determine country of origin well actually your honor i think that it isn't that simple because the issue on the scope is what is it worth what is it when it comes to the physically came from indonesia but that order covers finished tubing from china right it's or wasn't finished in china but it could still be considered finished shipping from china if the country of origin for this product i seventy seven twelve they didn't give you the full side of it and actually it only refers to the countervailing duties it doesn't refer to scope it doesn't refer to it and i don't think this is basically a left over from the original counter vailing duty section thirty no three it doesn't go to country of origin moreover there anything in the legislative history that suggests that six hundred seventy seven jack is designed to displace the preexisting well it's very interesting what six hundred seventy seven j the legislative history demonstrates is first of all that they had a problem the problem was what happens when a product is assembled in another country how do we determine that and they had pro they had a statute in two thousand in one thousand nine in one thousand nine hundred eighty eight and they found that they had some difficulties in administering it because it didn't really fully take care of everything so in one nine hundred ninety four as partly as a result the deputy oh they made some amendments to it and these amendments again are to deal with this substantial transformation is nowhere referred to in the legislative history substantial transformation is nowhere referred to in section three fifty one to twenty five which is the the entire examination of how to the scope procedures what are in a circumvention procedures how do we proceed there's no mention of substantial transformation in there if it's of central transformation is is is  e the great solution to how we determine the country of origin why is it that any uniform regulation that covers all manner of scope country has certain circumvention everything why isn't it mentioned it's not mentioned because this isn't this is something that the commerce department is doing instead of what congress passed which is sixteen seventy seven j and that if you look at the t out there then commerce would have referred to it and the congress would have referred to it as in the legislation somewhere in it's not referred to number two the commerce department would have preferred to it somewhere in their regulations on what ok we have these problems this isn't the first time this has come up so where that what is that what is the procedure that we have secondly you're suggesting that this natural transformation test is this is th fixed somewhere this is a moving target this changes all the time we had said we had six factors in your bearing four three of which the court basically said were irrelevant and said it was an end run around the statutory we look at scope and that we divine the country of origin one for an order and we only get to the specific provision that covers third party assembly and processing which is on all fours with this case it with this is the facts of this case and on the facts and pure bearing we only get to that well we're not sure when we get that we get to that if we want to and this was the problem that the and it gets to the question of well i guess that's the question right is sixty and seventy seven j supplement what came before or is it completely there's no evidence that it well that's a good question i don't think there is the answer is that there is absolutely no evidence that is it is supplement truth the evidence is that it is part of the same statute and that this is the way that we deal with the question of third country processing and it's very clear on it and there's a reason for that the house has a regulation call or one thirty four point one defining country of origin and if i mean that you mean customs or customs yeah yeah and so i guess what i'm wondering as well what extent does that rule in fact well that's a good question your honor because the customs service in one thousand nine hundred one it determined that the country of origin for o c g g is the place of heat treatment which is in the in indonesia that's using the country of origin of c b p now the commerce department says well we make our own decisions with respect to substantial transformation so we don't care what what they d but that's that is the way that the that that the customs service does that there was a determination on the record for twenty years for this case ever came up that said yes country of origin is is that this company that we represent again which would reinforce that and that's what provoked the petition the scope petition which said that they wanted commerce to specifically reaffirm that that the you are covers it seems to me that that both sides could benefit from it they dish and some words to the order you in fact i think very interestingly a couple minutes ago refer to whether it directly came from china which the trade court also referred to i think but there's no directly in the or on the other hand your friends on the other side or exactly what you just described that it covers tubes that call from china if they're it's a country of origin even if they are arch trans not substantial if they're not substantially transformed that their country but before their does it explicitly say one way or another have those conclusions so  the country process and what's the difference between substantial transformation and and not insignificant in that minor which is the standard for the circuit mentioned that sure but that statute if the order had included the if the scope says that it covers further processing and to get to your honor's earlier question about have there been any changes the answer is yes now there are many cases in which they say and if it's for the process then this order still applies that we gave you two examples in our brief with respect to the rams and with respect to solar panels were useless explicitly stated and yes you're absolutely correct in those circumstances what's the answer the answer is you look to the order first we don't look at anything else but b but the terms of the order but this morning didn't say that in this order didn't say regardless of where processed but it also doesn't say directly from china well  because it says from china and was this from china isn't there but that's a question is it from china in the answer is this is from indonesia it's not farces answer congress's answer is this is from china means a physical type of well meaning rather than a country of origin meaning well your honor i mean i don't see anything plate at all about that particularly in the context we're dealing with where commerce routinely looks a country of origin to determine where a product is fraught well i guess my your honor i guess i'm i'm puzzled because i have not seen any court decisions i know with what congress does but the question is i have never seen anything that has a pet sustain that the commerce department has its own way of doing it and the court in pure bearing and here is basically called that into question say well that's very interesting but you have a whole different set of variables that you are that you are applying not the statutory set and why not and the reason is because the statute also puts limits on what congress can do in terms of how they interpret the factors are different they have to find that it is not minor in insignificant and that's important because substantial transformation doesn't and that means there's going to be a difference and so the question is if you have this provision can you actually do substantial transformation is the test and i think that the court below in the court in pure bearing which for some reason decided by by counsel for a maverick what i think of both well i think that i think that's right your honor that but that's the reason that we look to the petition what did the petition discuss in terms of unfinished the petition was very specific it talked about well the reason we're covering  g enters the united states and it's finished in the united states this is part of the scope so that's the basis for the for that and we believe that the statute is clear on this and we believe that the  honor i'd like to attempt to clarify the legislative history somewhat nine hundred eighty eight legislative history does not discuss substantial transformation in the context of six hundred seventy seven jack we believe because congress  that commerce and customs would continue to apply the substantial transformation standard which has been the standard for the way of looking at country of origin issues for longer than anyone in this room has been alive the nine hundred ninety four statement of administrative action  page eight forty four contains language which is quoted in maverick's brief there united forty which we believe indicates that the congress and vision of the two co exist that you would first if necessary look at substantial transformation to determine whether a product was from a country covered by an order and then you would look at six hundred seventy seven j if necessary if the physical characteristics of the imported merchandise did not fall squarely within that six hundred seventy seven j is intended to prevent circumvention of an order so it gives you substantial transformation plus the chance in such and limited circumstances and i knowledge i have to be limited because you're going a little beyond the literal scope language if you do run into potential the beauty of concerns it gives you a chance to go a bit beyond the scope if necessary in a situation where it's being used to circumvent the order which goes back i think to an issue that the court previously raising with its question which is what would happen if we just threw out the substantial transformation test and all there were sixteen seventy seven jeff i think what would occur then is you would have many fact countries subject orders looking around the world and saying well what's the least we can do to get out of the order we don't have to change class a kind of merchandise we don't have to go so far as to conduct a substantial transformation of third country all we have to do is go a little bit beyond the minor in significant processing that's in vision six hundred seventy seven jet all we have to do is add a little bit more extra value so we give them an opportunity to find new ways of avoiding and he dumping in countervailing duty orders and in that way ironically six hundred seventy seven j which congress intended to prevent circumvention with facilitate it meanwhile what would customs be doing customs presumably as its regulat domestic industry would be worse off i understand your question your honor we do not believe that the six hundred seventy seven j covers the substantial transformation test we believe that the test outlined in six hundred seventy seven j is relatively narrow compared to a substantial transformation so you could have a situation for example where an order covers hype up to sixteen inches outside diameter and  someone at coding which takes it a little bit beyond sixteen inches outside diameter and that's not a substantial transformation but it could be covered under six hundred seventy seven jack converse league can have a situation